Keynote Address by Professor James J. HECKMAN

‘The Economic Case for Investing in Early Childhood Development’


  • James J. HECKMAN Henry Schultz Distinguished Service Professor in Economics and the College, and Director of the Center for the Economics of Human Development, University of Chicago
  • Matthew CHEUNG Kin-chung Chief Secretary for Administration, The HKSAR Government


  • Leong CHEUNG Executive Director, Charities & Community, The Hong Kong Jockey Club

Professor James Heckman said that one of the major problems cities faced was creating communities that were fair and equal.  Hong Kong could tackle this by building more inter-generational income mobility, which reduced income inequality.  To this end, Hong Kong had shown recent improvements, but more could be done.  The traditional approach to solving these issues was to adopt a tax and transfer policy – but unfortunately, this had been shown to be ineffective in addressing the long-term problem of inequality. He proposed that a better way to alleviate poverty and bring equality to society was to give all citizens access to better skills.  A more skilled workforce was more capable, more adaptive, and better equipped to deal with setbacks. This was backed by research that showed skills development to be a driver of life outcomes, including income. 

Hongkongers had responded to the value of skills by increasingly investing in higher education, Professor Heckman observed, but now we needed to dig deeper into how education could drive life outcomes. Research had shown that measures such as IQ had only a small (less than 5%) impact in this regard. Rather, it was the set of soft skills learned while attending school, such as developing intrinsic innovative abilities and grit, which were more beneficial.  In that sense, the focus on schooling was too narrow, as much of soft skills development, colloquially called “character building”, happened in the community and in homes, through day-to-day interactions. Therefore, he argued, what was needed was a consolidated policy to build soft skills in schools and communities, so as to avoid fragmentation where some groups received the necessary development and others were left out.

Research showed that early interventions were particularly beneficial, as they addressed social issues by preventing rather than treating problems. This could be a cost-effective way to address social issues, as highlighted by the Pareto principle indicating that around 20% of the population drove around 80% of the social costs.

Professor Heckman believed the best way to support young children was to help them build skills, as “skills beget skills”. Thus, supporting the young helped build a stronger foundation for the future. This was supported by research showing that early childhood programmes were particularly effective. Within these programmes, the training of parents was a particularly cost-effective and high-impact approach. Importantly, such interventions were not costly, requiring only periodic support (1-2 hours monthly) for parents.

Such programmes aimed at parents, specifically focused on disadvantaged communities, could help in building more equal and productive societies, Professor Heckman concluded.

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