Some working propositions on human capital development

Some working propositions on human capital development

This paper suggests some working propositions on human capital development and outcomes associated with it. These propositions are that:

  • investing in the earliest human development stages must be top priority
  • socio-economic status is the major factor associated with human capital development and socio-economic outcomes
  • concerted cultivation gives better outcomes than natural cultivation parenting styles
  • Self-regulation and ability are expandable not fixed resources
  • Identity and narratives matter, people have multiple identities and have to match them to context

Investing in the earliest human development stages must be a top priority

Who has children, and how many, shapes society.   Cognitive ability depends on who your parents are, some genetic variation, and on environmental and sociological influences starting in the first nine months and carrying through into childhood and beyond.

Better educated parents and especially mothers have healthier children with a better start in life (Currie & Moretti, 2002). A mother’s cognitive ability and education is a good predictor of childrens’ outcomes. Maternal IQ can influence child cognitive development genetically and through parenting.

Earliest development stages shape us irreversibly

The earliest human development stages have enormous effects on cognitive and non-cognitive skill development (Gluckman & Hanson 2006; Gluckman, 2009). The first nine months shapes us irreversibly. No innate genetic potential for intelligence will be fully realised if there is poor nutrition or severe damage from a mother’s ingestion of lead, alcohol or other harmful substances (see Chasnoff et al, 1998).

Epigenetics is the science of permanent gene expression in response to environmental influences. Before birth a foetus takes a “biochemical weather forecast” of the world it is likely to be born into (Gluckman, 2009). If the forecast is for favourable weather it will develop anticipating a long and peaceful life that favours long-term investments such as in cognitive development. If however the mother is subject to stress due to factors such as poverty or domestic violence, development may favour the physique and psychology needed to survive an uncertain and potentially dangerous world. In effect, fight or flight responses will be favoured over cognitive development.

A child’s early formative stages have an epigenetic, genetic and socialisation element. For example, a gene variant that predicts male conduct disorder and violence is most strongly expressed when child-rearing environments are adverse.

Any negative epigenetic impacts at foetal stage can be compounded by capricious and high variance childhoods, and a lack of parental stimulation and intimacy. Children exposed to a capricious environment will tend to focus on the short-term and lack the self-regulation needed for staying power. When they become young adults they often take high risks in the hope of short-term payoffs, however they may fear uncertainty.

Touching a baby or child, for example through hugs or combing hair, is a sign of surplus parental energy and time that provides subtle assurance that ongoing care can be relied on. Caregiver touch is therefore nurturing because it signals ongoing capacity to give (Field,1995). This relationship between nurturing (or the lack of it) and outcomes occurs in other species. Experimentally, when young animals are deprived of early stimulation and interaction with mothers their gene expression is altered in ways making them more susceptible to later life diseases.

Earliest childhood shapes lifelong health

Early childhood-related health problems can cast a long shadow through later life and into future generations. They are strongly associated with socio-economic status. Socio-economic status (SES) refers to a range of factors such as income, net worth, education, and the mind-sets and aspirations relating to individual and family advancement.

Cutler et al (2008) note that poor childhood health begets limited means in adulthood which in turn begets poor childhood health for the next generation. Some problems can be nutritionally-related, such as lack of trace elements and micronutrients, iron deficiency, and the effects of energy-rich but nutrient-poor diets.

Low childhood SES is associated with an increased risk of substance dependence and poor adult health over a wide range of dimensions. For example, Moffitt et al (2011) observed that individuals from low SES childhood backgrounds visit dentists less often in adulthood than those from a high SES upbringing.

Melchior et al (2007) conclude that a range of low SES factors studied accounted for 55-67% of poor health outcomes among adults from low SES childhood backgrounds.

Cognitive ability is shaped in earliest childhood

At least 50% of lifetime earnings variability among people is due to attributes determined by age eighteen (Heckman & Mosso, 2014). The ability to change neural circuitry is highest early in life and decreases with time (Knudsen et al, 2006). Core skills such as literacy and numeracy are shaped early and failure causes long-term problems (Wolf, 2002; Arnold & Doctoroff, 2003). Children’s cognitive and non-cognitive skills diverge at early stages between families of different parental income (Heckman & Mosso, 2014).

Heckman & Mosso (2014) concluded that IQ can be improved in lasting ways up to age three and perhaps later. Supportive sociological conditions need to be in place. Evidence from adoption and cross-fostering studies involving different SES groups suggests that around half the IQ disparity between children is experiential (Capron & Duyme, 1989).

Cognitive ability is wider than measured IQ

Cognitive ability is wider than IQ. Achievement tests such as the US SAT predict later achievement better than narrower IQ tests (Heckman & Kautz, 2012).

High levels of non-cognitive skills promote higher levels of cognitive skills, so skill stocks are synergistic (Cunha & Heckman, 2008). Heckman & Kautz (2012) observe that stable personality traits exist, and they predict and cause outcomes. Soft skills and character can be learned, and prevailing culture and social norms shape them.

In the US, the GED achievement test is given to school dropouts to let them demonstrate a high school graduate’s general knowledge. Those dropouts who achieve the GED at the same level as high school graduates still have worse outcomes, essentially because they lack other difficult to measure skills. After adjusting for cognitive ability, GED recipients are indistinguishable from dropouts, whereas high school graduates have higher incomes. Controlling for family background does not change this (Heckman & Kautz, 2012).

Quality early childhood education is a good investment

 

Early childhood is so important that the human, social and personal predictors of unemployment reach back to early childhood and begin to shape labour-market outcomes years before youth enter the work force (Caspi et al,1998).

Quality early childhood education (ECE) and remedial interventions have high returns over the lifecycle. Identifying and addressing learning disorders as early as possible and using early childhood interventions that “scaffold” children and supplement parenting have strongly positive longer-term effects.

Early intervention is more effective than targeting disadvantaged adolescents (Heckman & Mosso, 2014). Evidence in Doyle et al (2009) shows excellent returns from good ECE. Adult education programmes attempting to remediate educational neglect produces poor results for most individuals (Knudsen et al, 2006). These programmes may enhance social cohesion and help people fully participate in society, however they are not as good an investment as ECE.

Cunha & Heckman (2009) point out there is no equity-efficiency trade-off for investment in the capabilities of disadvantaged children. However there is a trade-off for investment in cognitive skills of disadvantaged adolescents and adults, though the trade-off is less dramatic for investment in non-cognitive skills.

For severely disadvantaged adults with low capabilities, subsidising work and welfare may be better in alleviating poverty than skills investment (see Heckman & Masterov, 2007; Cunha & Heckman, 2009).

Youth transitions are critical

Adolescent development and youth transitions to adulthood are critical. The early teen and adolescent years see young people adapt to physical and sexual development. This races ahead of their intellectual and emotional maturity, rationality, and ability to manage risk. They are developing their individual identity and crave group identity and peer recognition.

Important in late teens are secondary-tertiary transitions. Participating in the workforce while still at school is valuable. It is at the late teenage stage where the best adolescent interventions feature mentoring and scaffolding. Integrating work experience with traditional education can be valuable (Heckman & Mosso, 2014).

Differential susceptibility (or “orchid-dandelion” theory) argues that young people can be like dandelions surviving over a wide environmental range, or be like orchids struggling in most environments but flourishing in the right hothouse conditions. This emerging field may deepen our future understanding of late teen and early adulthood interventions.

The social capital built up in childhood shapes how teenagers address challenges and opportunities. This social capital will include aspirations, self-respect, how life choices and risk profiles associated with them are perceived, and the balance between today’s temptations and future human capital and other investment.

Low self-esteem during adolescence predicts negative real-world consequences during adulthood (Trzesnieski et al, 2006). Young people with little social or health capital may be more likely to take up hazardous consumption and shun investments in human capital. This raises their likelihood of a “rags to rags” sequence.

Youth from deprived backgrounds may have lower expectations of future success, independent of choices they make. Clarke et al (2006) found that fifteen year olds’ expectations of success predict the subsequent onset of smoking, lack of exercise, and failure to complete high school. While some of the influence of expectations can be explained by low social and health capital, IQ and other factors, expectations retain a direct effect on smoking and exercise once these other factors are controlled for.

Expectations are a better predictor of grades for socio-economically advantaged than for disadvantaged children. Small social-psychological interventions that target students’ expectations about school can lead to enduring gains in student achievement (Yeager & Walton, 2011).

Social-psychological interventions do not teach content. They set in play recursive social, psychological and intellectual processes. These interventions are especially important at key academic junctures. They are best delivered indirectly or even “stealthily”, that is without the knowledge of those whose behaviour is being changed. As such they do not feel controlling and they minimise resistance to the message. Interventions delivered stealthily do not stigmatize students as if they need help because of inherent failures, perceptions of which can reduce achievement.

Socio-economic status is the major factor associated with human capital development and socio-economic outcomes

In developed countries socio-economic status, rather than for example race and ethnicity, is the major factor associated with education and socio-economic outcomes. Lynch & Oakford (2014) report that black and Hispanic children in wealthier states such as Massachusetts and New Jersey outperformed their white counterparts in poorer states such as Alabama and West Virginia in the eighth grade maths component in the 2013 National Assessment of Educational Progress (NAEP).

Socio-economic status shapes the family environment and therefore the parental and wider social environment children are subject to. Family environment in early years and parenting are critical determinants in shaping the lifetime skill base. Through dynamic complementarities they enhance the productivity of downstream investments. Family characteristics are often more predictive of student results than the characteristics of the schools themselves.   The greatest sources of differences in school achievement come from what children bring to school from their home and social environment.

Family income is only loosely correlated with the resources available to a child, for it is parenting rather than income that most matters. This is reflected in the high educational and wider achievement of immigrant minority groups who may start out poor in a new country but rapidly become socially mobile.

However, money does matter and relative poverty can be associated with higher fertility. This means resources of time, parental attention and money may be spread thinly. Teenage pregnancy is indirectly caused by poverty. It can be a rational choice for poorly-educated females for whom motherhood confers identity and gives access to resources. Birth order can also matter, especially for resource-constrained families. First-born children can receive relatively more early child investment than later ones (Hotz & Pantano, 2013).

Relative poverty and rank status inequality is stressful. Lynch & Oakford (2014) summarise a mass of US evidence that children from poorer households are relatively backward in other cognitive capabilities, and that poor early child development is associated with parental stress and with a lack of emotional support and cognitive stimulation for children.

High levels of childhood stress can have negative effects on cognitive development. This impacts particularly on the parts of the brain that support working memory, long-term memory, spatial processing and pattern recognition (Hackman & Farah, 2009).

Stress generates hormones which affect the brain (Gunnar & Quevedo, 2007). Mothers subject to chronic stress while pregnant have babies with lower mental development at twelve months (Davis & Sandman, 2010). The longer a child lives under stressful conditions the higher the basal levels of the stress hormone cortisol (Evans & Kim, 2007).

People under stress can become overwhelmed, and this can lead to using the wrong brain structure for a task. Stress can see the basal ganglia (which controls instinct and automatic behaviour) overcome the hippocampus (we forget things) and the pre-frontal cortex (we forget things or act irrationally). For example, someone under stress who should be thinking rationally can revert to automaticity controlled by the basal ganglia, leading for example to temporary child neglect.

Stress can have second order or indirect consequences. For example, women’s earnings can be lower because they have more distractions at home and they go into occupations allowing them to address home-life problems.

The conditions low SES children are subject to can harm development of language, working memory, task planning and impulse control. Low executive function can be especially harmful for self-regulation. Executive function is influenced by parent-child interactions in infancy. Low SES children suffer underdevelopment of the left perisylvian/language system and the pre-frontal executive system (Nobel et al 2007; Farah et al, 2006).

The executive system and function is from the prefrontal cortex brain structure. It enables flexible responding to non-routine situations where new information must be understood and responded to. Early executive function is a robust predictor of later academic achievement (Blair & Diamond, 2008).

Lawson et al (2013) show that childhood SES predicts executive function performance and measures of pre-frontal cortical functions, and that parental education significantly predicts cortical thickness.

Having nurturing parents at age four is related to the volume of the hippocampus (a crucial memory structure) at age fourteen. For children aged 22-44 months, simple sentence structure does not differ among SES groups but complex structure does. Low SES explains around 30% of variance in language ability (Noble et al, 2007). Language and vocabulary are critical because language is the medium through which most knowledge and skills are taught. High vocabulary correlates with real work ability (Hirsch, 2013).

Concerted cultivation delivers greater benefits than natural cultivation parenting styles

Two simplistic and contrasting models can be used to make tractable complex relationships between parenting and SES status: “concerted cultivation” versus “natural cultivation” (Lareau, 2011).

Higher SES parents tend to have a concerted cultivation parenting style involving intensive and structured parental input and organised children’s activities. They stimulate their children with lots of toys, trips, cultural experiences, sport and music. They engage their children more and increase the formative value of sport and cultural activities (Lareau, 2011).

High SES parents reason with and verbally joust with their children, giving them choices, and encouraging them to think for themselves and to challenge parents and teachers. They ask open-ended questions to encourage speech growth and adaptability. Their children are exposed to more words and develop richer vocabularies.

Lower SES parents adopt a more natural cultivation style where children are given more freedom and have to entertain themselves or be “entertained” passively with digital games or television. They have fewer active and engaged educational and cultural experiences and less exposure to reading and language. Hancox et al ( 2005) argue that excessive television viewing in childhood may have long-lasting adverse effects on educational achievement and well-being. It is unclear what the future effects of excessive electronic device and social media use may be.

Lower SES parents typically work in jobs with low autonomy. They therefore adopt more authoritarian parenting styles emulating their low working life autonomy. Their children are more subservient to adults, less creatively contrarian and less able to wing it among strangers. They are accustomed to black and white decisions or yes or no answers and this inhibits child response and speech development.

Concerted cultivation tends to create a greater sense of entitlement and a higher sense of available possibilities. Natural cultivation can see children feel constraint and limitations on what they can achieve.

Wider social connectedness is associated with good outcomes

A higher SES upbringing develops the non-kin relationships needed in modern economies and in the professional jobs they create. Social connectedness is an important pathway from adolescence to adult wellbeing (Olsson et al, 2012). Participation in clubs and other groups widens young peoples’ social interactions and exposes them to more ideas and more people outside kinship groups (see McGee et al, 2006). This latter is important as the wider one’s social networks the more opportunities become available and the more people get used to social variety, diversity and change. This hones the social skills needed in complex and changing workplaces where autonomous decision-making and self-management are required.

Human psychology has its origins in selfish gene, inclusive fitness logic, in kin-based relationships and in reciprocal, face-to-face trade. However, as societies become more complex, trade, cooperation and supporting institutions become impersonal. Institutions develop to create abstractions or symbolic representations of physical wealth. This allows capital to be leveraged for purposes of accumulation, borrowing, applying time value to money and allowing impersonal trade (de Soto, 2000).

In hunter-gatherer times there were no banks or superannuation schemes and so our ancient ancestors saved through reciprocal altruism. They survived by sharing a surplus today and banking up a sense of obligation that this favour will be returned when fortunes are reversed. Survival depended on consumption and there was no conception of capital or capital productivity. That is why people innately understand jobs and labour productivity but not capital productivity. It is why economic growth is associated with job growth rather than trade betterment or capital formation and why misguided theories such as the labour theory of value emerge.

In evolutionary times, resources were subject to effort-independent random variance as a result of seasonal, climatic and other factors. Sharing in situations of resource variance produces average net gains to participants because it shifts resources to those with higher marginal returns (Petersen et al, 2012).

However, high effort-independent variance in economic activities at the individual through to the macroeconomic level makes it impossible to achieve economic growth. It discourages savings, asset development, accumulation and future-oriented education and skill development. It triggers an ethic of widespread sharing for today rather than accumulation and human capital creation for tomorrow.

Not surprisingly, cultures that have more traditional and kinship-based relationships can have a live for today ethos based on tangible physical resources. Other cultures leverage abstract property rights from physical assets in ways underpinning future-oriented investment, and capital accumulation and sophisticated trade.

A psychology of future-oriented capability development and asset formation builds awareness of long-term ends rather than short-term consumption opportunities. Holding assets is associated with better socio-economic outcomes (Bryner & Paxton, 2001) and with childrens’ educational attainment (Zhan & Sherraden, 2003). It focuses children on future-oriented capability development rather than a hand to mouth consumption or living for today ethos.

High SES children do better in education

Low SES children suffer poorer parenting and compromised early environments over several dimensions (Heckman & Mosso, 2014). This affects educational performance. Higher SES parents connect better to the education system since they have themselves navigated the system and because educators are often peers. Lower SES parents may hand their children to educational institutions rather than be actively engaged with those institutions. These children can also be vulnerable to low teacher expectations as well as negative parental attitudes and peer influences.

Higher SES children are therefore able to disproportionately benefit from access to higher education because they have the necessary skill bases to benefit from it. Lower SES children are less able to benefit from university even where assisted by financial subsidies as wider skill bases as well as financial resources matter.

This has educational funding implications. Public investments in education lead to different outcomes independent of resource inputs. Increased public funding of education may not necessarily reduce educational inequality. More skilled parents increase the productivity of public investments. Public investments may or may not “close the gaps”, depending on patterns of substitutability with parental skills and private investments.

Bowen et al (2009) estimate that reductions in tuition costs can increase completion rates for students from the poorest backgrounds. There is also evidence that class size influences achievement and that reducing class sizes benefits lower SES children (Arnold & Doctoroff, 2003).

However, untargeted increased spending on education can increase inequality and lower net national income by creating “Mathew effects” (“to he who has shall be given even more”). It can increase “Red Queen races” where people have to run harder just to stay in the same place, and amplify credential inflation which increases total education costs and therefore places exceptionally high burdens on low income people.   This suggests that targeted rather than universal public investment in education may be more effective for social mobility.

Lower SES children have some advantages

Lower SES parents and children may have some advantages. They often spend more time together as a family and have closer links to kin. They may enter into more cooperative arrangements to share childcare and this can build stronger links, especially with kin.

High SES childrens’ organised activities can often replace rather than provide family interactions. Lower SES siblings may fight less and be more supportive of each other. They may listen more closely to others and be more differential to authority figures, which may be helpful in some environments. Kraus & Keltner (2008) find that high SES children can be less engaged in conversations with others because they are more self-reliant.

Higher SES children can whine more, be bored more easily and be less compliant with parental demands. They may initially appear older than low SES ones, however this can reverse in early adulthood. They may be more dependent on their parents even as adults.

Parents who protect their children from failure can make it more difficult for them later in life. While concerted cultivation helps children adapt well to today’s institutions, will this be true in future if these institutions struggle to adapt to technological, social or environmental change?

Self-regulation and ability are expandable not fixed resources

Self-regulation and will power are important traits needed in sticking at tasks and in foregoing immediate gratification in favour of longer term study, saving and investment. Conscientiousness predicts educational attainment, health and labour market outcomes as strongly as measures of academic ability (Heckman & Kautz, 2012).

Self-regulation, patience and staying power are fundamental determinants of educational performance and working life achievement. Higher cognitive ability is closely associated with higher patience, and is especially important with complex tasks (Heckman & Mosso, 2012).

Self-regulation is shaped from the first nine months and into childhood and later life stages and is influenced by external environmental influences.   Childhood self-control predicts physical health, substance dependence, personal finances, and criminal offending outcomes.

Effects of children’s self-control can be disentangled from their intelligence and social standing. Interventions addressing self-control might reduce many societal costs. Moffitt et al (2011), in a study of sibling cohorts found that siblings with lower self-control had poorer outcomes, despite shared family background.

Self-regulation is a competency that can be developed and helps lead to choices in life and self-determination. The Ryan & Deci self-determination model holds that competence and autonomy give rise to self-determination and therefore control over one’s life (Ryan & Deci 2000). Self-determination depends on competency, relatedness to others, and an autonomous sense of personal responsibility. Where these traits are present they give rise to self-determination.

Self-regulation, as opposed to externally-imposed regulation depends on high intrinsic motivations. Intrinsic motivations for self-control thrive in an environment of external support, security, predictability and relatedness to others (Ryan & Deci, 2000). Relatedness to others is an important influence on self-regulation and self-determination. Self-regulation may improve when demands on self-control are especially strong, however, there needs to be a balance between extrinsic and intrinsic motivations and an understanding of how they interact.

External threats and rewards can diminish intrinsic motivation. This is because they conduce towards an externally-perceived locus of causality. Excessive, coercive regulation means people disown responsibility. Extrinsic influence must therefore be autonomy-supportive. Teachers who are autonomy-supportive catalyse in their students greater intrinsic motivation and the self-regulation associated with it.

Some religious beliefs can reinforce self-regulation by economising on cognitive energy and inducing something akin to a placebo effect. However such religious belief can also stifle expressivity and autonomy and channel energies in unproductive ways.

There are competing views on whether self-regulation is a limited resource that can be depleted by use (the “ego depletion” theory) or is expandable. Duckworth & Seligman (2005) argue that self-control is a limited resource. People may make short-term and irrational decisions because they have limited cognitive energy and attention. This scarce resource is focused on short-term problem solving driven by poverty and low human capital. In contrast, better paid people can pay attention in learning and at work because they have more “comfort goods” and fewer other things to distract them (see Banerjee & Mullthainathan 2008; Mullthainathan & Shafir 2013).

Job et al (2013a) argue that self-regulation and willpower are not limited resources and that people do better when they think of them as unlimited. They find that students who believe in an unlimited theory of self-regulation had better time management and less procrastination than those believing self-regulation is limited.

People also do better when they think that abilities can be expanded rather than being a fixed resource. Dweck (2006) argues some people have a fixed mindset and believe their abilities are immutable. Others have a growth mindset believing they will do as well as they are prepared to work. The former fear failure while the latter learn from it to improve performance.

How parents and educators frame and communicate abilities to support either a fixed or growth mindset has profound implications. Some students believe when they sit an exam they are starting with 100% and every mistake they make will cost them marks. Others consider they are starting with nothing and the harder they work the higher their marks.

Children’s motivation and persistence is encouraged by emphasising effort rather than intelligence (Kamins & Dweck, 1999). Praise for intelligence can undermine motivation and performance because it implies a fixed endowment that is a ceiling rather than a floor. It is better to say “you did well because you worked hard”, not “you did well because you are smart”. Teaching students that intelligence is malleable will buffer students from some negative stereotypes in school (Yeager & Walton, 2011).

While the effectiveness of the growth mind-set in boosting achievement is clear, mechanisms underlying this are less well understood. The brain can grow connections and become smarter as it works on more challenging tasks. There may also be something akin to a placebo effect at work, and this may interact with other variables.

For abilities to be malleable, people have to believe them to be so. Persuading students that cognitive ability can be grown can lead to higher achievement levels (Yeager & Walton, 2011).   School achievement is predicted by self-perceived abilities even after IQ is accounted for. Some evidence suggests that self-perceived abilities have some genetic rather than just environmental elements (Greven et al, 2009).

Identity and narrative matters, people have multiple identities and have to be matched to context

Consciousness researchers argue there is no “ghost in the machine” and that consciousness “makes up” a sense of individual identity to construct meaning from the world. This identity or sense of “I” seeks patterns in group identity and a coherent explanatory narrative. People seek connections to something wider than themselves that overcomes their sense of isolation. Abandoned children will cling on to one photo or other memento of the parents who deserted them.

The brain, faced with environmental stimuli, must decide on what is relevant and exclude irrelevancies. The brain creates missing information to fill in gaps and confirm a pattern it imagines should be there. Pattern, narrative and accumulated prejudices can build on valid assumptions and economise on cognitive energy that would otherwise be expended making things up afresh.

People lacking a coherent narrative and with little sense of transcendental identity or continuity over time seek immediate sensation as well as blocking out of self-reflection. Terror management theory contends that cultures, symbolic systems and narratives that make individuals feel part of something transcendental (such as an intergenerational group that survives individual mortality) imbue life with meaning and help overcome fear.

Learning builds on past foundations. Learning is cumulative and so curricula have to be designed to build knowledge cumulatively and coherently. Higher SES groups can engage in more academic rather than applied or vocational learning at secondary school. This often engages them in cultural heritage whether it be Shakespeare, classics, and languages (including “non-utilitarian” ones such as Latin).

This helps build up a sense of long-term cultural heritage, identity and narrative which connects people to their antecedents and to what will come after. This gives people perspective. This is most powerful when it constitutes a whakapapa of the mind rather than a more narrowly channelled kinship-based whakapapa. It also helps when it is outwards rather than inwards-looking.

Identity can shape outcomes (Akerlof & Kranton 2002; 2010). By young adulthood most people have well-developed group identities or a compelling need for them. Humans evolved in groups for such purposes as optimising sustainable food harvesting over discrete areas, while defending themselves from out-groups. Group identity evolved both a double standard of morality between in and out groups and the cultural markers to reinforce this.

Identity as part of a group provides access to resources and confers protection to an individual. Feeling part of a group economises on scarce cognitive energy, for example by giving a set of culturally heuristic rules of thumb that avoid the cognitive burden of making things up from first principles. Pride helps motivation (Williams & Destono, 2008) and pride in group identity can enhance performance.

Identities shape how individuals perceive and respond to opportunities. When individuals are insecure they can identify with groups who they perceive provide protection from out-group threats. People can attribute exaggerated influence to others or to enemies to compensate for reduced control over their own environment. Group leaders’ status reflects how people within a group perceive their ability to protect the in-group. Not surprisingly, group leaders can have incentives to amplify or even create external group threats.

Group identity will often be cultural. Cultural factors impinge on educational outcomes, however underlying economic circumstances give rise to culture more than the other way round.

With greater social complexity, identities become more multivariate. People have multiple identities relating to gender, age, race, ethnicity, religion, political beliefs, sporting affiliation, community position, job, profession and a host of other identities. The identity most to the fore at any time must be matched to the right context. For example, a surgeon’s identity at an operating table must be that of a surgeon, not of a rugby player, libertarian, wine taster, Catholic, gay, sailing coach, trustee, sister, or any other identity that person may have in another context.

Identity’s multiple nature is fundamental to educational performance. People behave in ways that are identity-congruent rather than identity-incongruent. Schools should offer diversity in the identities associated with the school that children can connect to. This means more children can find a way to connect to the school and be connected to ways others see the world.

Learning is enhanced when group activities are more associated with cognitive development. For example, is a child’s most salient identity after school that associated with a rugby league team or a chess club?

However schools that seek to mould student identities to reflect religious, cultural or ethnic identities that exclude other identities will limit student prospects. If people look inwardly and narrowly they limit learning and intellectual stretch and as a result their cognitive development and memorisation abilities become constrained.

People learn not through rote and repetition but by being encouraged to think widely about what they are supposed to memorise. Fundamental to learning is memory and memory results from thinking about content. Memory is to a substantial extent the result of and residue from thought. Memories are recovered by cues, hence the value of mnemonic associations and of acrostic, music, rhyme and key word devices as cues to recall from the unconscious what is in the memory. The wider the learning and its interdisciplinary spread the more there will be in the memory and the more cues are available to recall what is memorised.

Group identities can see individuals with multiple identities typecast as belonging to one identity only. This can lead to stereotypying that threatens prospects in education, the employment market and life. Group identity can also risk affinity fraud by other members of the same group. Stigma associated with one of a person’s multiple identities can give rise to belonging uncertainty as people are sensitive to information diagnostic of the quality of their social connections.

Understanding which of someone’s multiple identities should be salient for the individual within a specific context is fundamental to people positively identifying with learning, and to avoiding stereotypical threats to people associated with one particular identity group which faces barriers.

Stereotypical threat occurs when a particular group identity an individual is associated with is treated negatively by others. This shapes how others perceive the individual, how the individual perceives herself, and this can constrain or enhance long-term achievement.

Stereotypical threats may emerge to ethnic minorities, women, and to people of certain ages or religious groups. Stereotypical threats might include a view that women are not suited to engineering or that Afro-Americans are better at basketball than maths. Stereotypical threat systematically reduces its victims’ achievement (Walton & Spencer, 2009).

Stereotypical threat undermines performance by taking up executive resources, through distraction, and probably through other mechanisms. Sexist or racist attitudes may also create tangible rather than purely psychological barriers to people reaching their full potential.   Some American evidence suggests that Afro-Americans and Hispanics may drop out of school partly because they accurately perceive the local labour market will not pay a premium for their education.

Reductions in stereotypical threat boost academic performance. However stereotypical threat cannot be countered effectively by exacerbating in-group intolerance to potential external “threats”, perceived or actual. Special religious or ethnic schools can risk signalling that students are problem children rather than requiring schools to support diversity. There is little evidence that same ethnicity teaching helps, though some limited evidence culture can matter in teaching (Arnold & Doctoroff, 2003).

Stereotypical threats can be countered through focusing on academic achievement-related identities rather than, for example, ethnic or cultural ones. Alternatively, when minorities see their academic future selves as consistent with their ethnic identity, students’ motivation will increase (Yeager & Walton, 2011).

Affirming important values, for example through writing short essays about what a person values about herself, can help people exposed to stereotypical threat do better academically.

Social belonging helps protect against stereotypical threat. Socio-belonging interventions have improved grades and school-related attitudes among Afro-American students and female engineering students in the US. If a person has a sense of belonging then setbacks may be negative but not diagnostic. For example, leading students to attribute worries about identity to difficulties of transition to a university, rather than being due to students’ identity, can bolster a sense of belonging (Yeager & Walton, 2011).

Concluding comments

The above propositions can focus future work on human capital development to enhance socio-economic outcomes in enduring ways.

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About Peter Winsley

I’ve worked in policy and economics-related fields in New Zealand for many years. With qualifications and publications in economics, management and literature, I take a multidisciplinary perspective to how people’s lives can be enhanced. I love nature, literature, music, tramping, boating and my family.
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2 Responses to Some working propositions on human capital development

  1. ashokbhatia says:

    What a thorough post! It would be an insult to comment upon this in a rash manner.

  2. Tony Scott says:

    Thanks Peter.

    Been a while between posts! Interesting read as usual. Thanks.

    Tony Scott
    04 462 5341

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