Workshop on Human Potential (Flavio Cunha, University of Pennsylvania)

Flavio Cunha, Assistant Professor of Economics, University of Pennsylvania, will present, “Eliciting Maternal Beliefs about the Technology of Skill Formation.”

Flavio Cunha is an Assistant Professor of Economics at the University of Pennsylvania. His research focuses on the determinants and consequences of inequality and poverty. In particular, he studies how early investments in human capital affect an individual’s success later in life. His current research tries to measure parental expectations about the returns to early investments and how their expectations affect actual investments.


Abstract: In general, economic models of human development assume that mothers have rational expectations about the technology of skill formation, that is, about the process that determines how their offspring develop skills in motor, socio-emotional and cognitive domains. This assumption implies that all women -- regardless of their race, education, or socio-economic status -- have the correct information regarding how investments affect the development of their children.

When such models are structurally estimated, the variation in observed investments across families is attributed to shocks, heterogeneity in the characteristics of the children or families, but not to the heterogeneity in the knowledge base of the mother. In this paper, we test a framework to elicit maternal subjective beliefs about the technology of skill formation. In addition, we analyze the child development data from the CNLSY/79 to obtain an objective estimate of the technology of skill formation. By comparing the objective estimates with subjective beliefs, we are able to determine the accuracy and precision of maternal subjective beliefs about the technology of skill formation. We find large heterogeneity in beliefs about the returns to investments. More importantly, we find that the median woman tends to underestimate the impact of investments in the human capital of children. The underestimation is more pronounced when the children's health conditions at birth are poor.

The Workshop/Working Group on Human Potential is one of the core intellectual activities of the Center for Human Potential and Public Policy. It is an interdisciplinary forum for graduate students, post docs, and faculty whose work concerns behavior, health, and well-being across the lifespan and the ways in which technology and public policy shape human potential and achievement. The Workshop/Working group has active members in the areas of the social, behavioral, health, and policy sciences.

The Workshop/Working Group on Human Potential alternates between two types of sessions. Not only do we regularly invite outside speakers for a traditional "workshop" presentation, but we also provide a forum for faculty, post-doctoral fellows, and graduate students to present research-in-progress in order to receive critical and constructive feedback.