PREOPP

PREdistribution, skills and children OPPortunities: Theory and evidence from early childcare and education reforms in Italy and Sweden

The research project is supported by the University of Verona Basic Research Grant 2019/RBVR19FSFA

Abstract:

Inequality is one of the defining challenges of this century, as also formalized by the 2030 UN Sustainable Development Goals. Some inequalities arise from individual choices and could be considered acceptable. Some others are rooted in the circumstances experienced during childhood, which have implications for the process of accumulation of skills and for the income potential of affected individuals. Arguably, these inequalities deserve to be compensated.

Early intervention programs, taking place before human capital and income potentials are realized, may contribute to reduce the extent at which circumstances affect income opportunities by “predistributing” the inputs of the skills formation process (cognitive and non-cognitive skills, effort choices), rather than redistributing outcomes. There is broadening evidence of the intergenerational consequence of targeted early intervention programs on the outcomes of the treated children. Nonetheless, evidence on the predistribution effect of large, universal (as opposed to targeted) interventions is still limited.

The PREOPP project contributes to the literature both theoretically and empirically. Empirical innovations will evaluate the intergenerational consequences on skills and incomes of two reforms. First, we focus on the expansion of early childcare (0-2 years old) budget, which took place in Italy about 2007, on skills development of children benefitting from it. Our second contribution will use rich Swedish register data to assess the implications of an important mandatory education reform (taking place in the 1950s) on the skills (at age 18) and income potential (about age 40) of exposed children. This policy evaluation exercises will add to the knowledge of the predistributive effects of expanding early education programs or of abolishing streaming and rising late education standards, as evaluated directly on the skills and indirectly on incomes of the treated.

Furthermore, the project will shed lights about the way policy effects and cognitive and non-cognitive skills complement each other to hamper or magnify the predistribution effects of these policies. The theoretical contribution of PREOPP will develop tests for quantifying the predistribution effect of policies looking at multivariate distributions defined on an ordinal scale (such as distributions of skills by parental background type) and it will prove the normative underpinnings of these tests. These results will apply to a broader spectrum of situations where one is interested in the extent of dissimilarity between distributions.

Keywords: Inequality, equal opportunities, welfare, policy evaluation, education expansion, skills.

Research team:

- Francesco Andreoli (University of Verona and LISER)

- Ylenia Brilli (Uniersity of Venice)

- Vincenzo Prete (University of Verona)

- Markus Jantti (SOFI, Sotckholm University)

- Arnaud Lefranc (THEMA, Cergy-Paris Seine University)

Partners:

- Department of Economics, University of Verona, Italy

- Luxembourg Institute of Socio-Economic Research

- SOFI, Stockholm University.