Monday, 23 December 2019

Rea and Burton on the Heckman Curve

Now available in early edition at the Journal of Economic Surveys, Rea & Burton's article testing the Heckman curve against the ROI in projects compiled by the Washington State Institute for Public Policy.

Abstract

The Heckman Curve characterizes the rate of return to public investments in human capital as rapidly diminishing with age. For the disadvantaged, it describes investments early in the life course as having significantly higher rates of return compared to later in life. This paper assesses the Heckman Curve using estimates of program benefit cost ratios from the Washington State Institute for Public Policy. We find no support for the claim that social policy programs targeted early in the life course have the largest benefit cost ratios, or that on average the benefits of adult programs are less than the cost of the intervention.
You may have caught the working paper version over at Andrew Gelman's place, or here. The key graph remains this one.

I wonder whether Heckman might provide any comment in the eventual issue of the journal - this is just the 'early view'.

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