Early Childhood Development, Human Capital and Poverty. Working Paper 29362

Children's experiences during early childhood are critical for their cognitive and socio-emotional development, two key dimensions of human capital. However, children from low income backgrounds often grow up lacking stimulation and basic investments, leading to developmental deficits that are difficult, if not impossible, to reverse later in life without intervention. The existence of these deficits are a key driver of inequality and contribute to the intergenerational transmission of poverty. In this paper, we discuss the framework used in economics to model parental investments and early childhood development and use it as an organizing tool to review some of the empirical evidence on early childhood research. We then present results from various important early childhoods interventions with emphasis on developing countries. Bringing these elements together we draw conclusions on what we have learned and provide some directions for future research. [Additional funding for this report was provided by the ESRC-funded Centre for the Microeconomic Analysis of Public Policy, the Cowles Foundation, and the ISPS at Yale.]