Nutrition, Health and Education: The Economic Significance of Complementarities at Early Ages

Abstract

This paper attempts to evaluate the economic significance of the following pieces of empirical evidence:

• (1) An increasing number of studies show that pre-school-age children of the lower socio-economic groups in developing countries perform substantially worse in tests of cognitive development than children from higher income groups.¹

• (2) These studies also show that a large part of this difference can be attributed to factors able to be influenced by public policy. Malnutrition, lack of sanitation, low levels of psychological stimulation and other environmental deficits surrounding children in poverty are some of these factors.²

• (3) Earnings functions, relating earnings to levels of schooling and early ability scores, if available, show that early ability not only has an independent effect on future earnings. More important, the functional forms that seem to fit the data best imply a complementarity between schooling and ability, the marginal product of additional schooling depending on the level of pre-school abilities of the child.

I am much indebted to Ricardo Martin for suggestions that greatly improved an earlier version. Comments on earlier drafts by Nancy Birdsall and Marc Nerlove are gratefully acknowledged. The views presented here are the author’s and do not necessarily represent those of the World Bank.