The Production Function of Cognitive Skills — Young Lives

This paper explores the determinants of children's cognitive outcomes using novel panel data from two cohorts of children in India. The results show that lagged inputs affect the production of current skills. In models where past inputs are not observed or imperfectly measured, past nutritional status and/or past test scores turn out to be a good proxy-indicator of this variable, which is evidence for the 'sufficiency' assumption. The author also studies the behaviour of home inputs and finds that parents seem to 'reinforce' children for early favourable outcomes rather than 'compensate' them for adverse scores; and they do so more in lower caste families and particularly with boys.