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Contributions of Economics to Global Health Policy

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  • 1. An Example of Multidisciplinary Research with Relevance for Global Health Issues Jennifer Warlick 245 O’Shaughnessy jwarlick@nd.edu
  • 2. Outline of talk • Introduction • Quick primer on human capital theory • An example of multidisciplinary research – Knudsen et al. on early childhood development • Also see AIDS in developing nations at www.aiid.
  • 3. Introduction • What I have to offer – appreciation for multidisciplinary research • Past experience at HEW and IRP • Director of Poverty Studies Interdisciplinary Minor • Lessons of economic research are necessary but not sufficient for the solution of social problems including health problems • What I don’t have to offer – Original research on health issues
  • 4. Economics and Health Issues • Health issues are on economists’ radar screens because they affect the development of human capital (productive skills embodied in humans) which in turn determines – economic well-being of individuals, and – in the aggregate, economic growth of countries
  • 5. Human Capital Theory The human capital perspective considers how the productivity of people in market and nonmarket situations is changed by investments in education, skills, and knowledge. Gary Becker, “Economic Way of Looking at Life, ” Accounting for Tastes, 1996.
  • 6. Basic definitions and concepts 1. Human capital: the stock of knowledge, skills, aptitudes, education, and training that an individual or a group of individuals possess. 2. Human capital can be acquired. 3. Acquiring human capital can be costly. 4. Investment in human capital can generate returns in the form of higher earnings or an increase in the quality of nonmarket work. 5. Investments are evaluated in terms of their net benefits: • Decisions are based on a comparison of costs with expected future returns 6. Human capital cannot be transferred generally.
  • 7. Investments in Human Capital Investment takes place in three stages: 1. In early childhood • Parental and early schooling experiences influences o Basic language and mathematical skills o Attitudes toward learning o General health and life expectancy 2. During teen and young adult years • High school, vocational school, college 3. After entering the job market • On-the-job training, post baccalaureate schooling
  • 8. Human capital and economic growth • Economic growth (GDP) is influenced not just by quantities of labor and capital but also by their quality. • Human capital is a critical component of the wealth of individuals and nations: – When the World Bank estimated the per capita wealth of 92 nations, the U.S. ranked 1st: 23 percent of the wealth was natural and physical capital (natural resources, buildings, and machinery), and 77 percent was human capital.
  • 9. Investing in Disadvantaged Young Children Knudsen, Heckman, Cameron, and Shonkoff
  • 10. The Public Policy Issue • A growing fraction of the nation’s workforce will consist of adults who were raised in disadvantaged environments characterized by: – Poverty – Limited parent education – Parental mental health problems – Significant social deprivation or neglect – Exposure to interpersonal violence • What are the implications of this trend for the individuals and the future success of the U.S. economy?
  • 11. Children in Poverty • Number of children living in poverty has never been higher – 14 million children • 1 in 5 children • True for every racial category – 1 in 10 white children – 1 in 3 black children and Hispanic children – 1 in 7 Asian children – Black and Hispanic children are 3X as likely to live in poverty than white
  • 12. Over their childhoods • Young children have highest poverty rates – 1 in 6 children under age 6 • Poverty rates are higher when measured longitudinally – 1 in 3 children experienced poverty over the period 1996-1999 • Family environments have deteriorated in the U.S. – More children born to teen mothers – More Children living in single parent homes • Source: www.census.gov
  • 13. Issue Tackled by a Multi-disciplinary Team • Eric I. Knudsen, Professor of Neurobiology, Stanford University Medical School • James J. Heckman, Professor of Economics at the University of Chicago, , who shared the 2000 Nobel Memorial Prize in Economic Sciences. He directs the Economics Research Center and the Center for Social Program Evaluation at the Harris School. • Judy L. Cameron, Professor of Psychiatry at the University of Pittsburgh, professor of behavioral neuroscience and obstetrics & gynecology at Oregon Health and Science University, and a Senior Scientist at at the Oregon National Primate Research Center. • Jack P. Shonkoff, Professor of Child Health and Development at the Harvard School of Public Health and Harvard Graduate School of Education, and founding director of the university-wide Center on the Developing Child at Harvard University.
  • 14. Results appear in: • Knudsen, Eric I., Heckman, James J., Cameron, Judy and Shonkoff, Jack P. (2006). "Building America's Future Workforce: Economic, Neurobiological and Behavioral Perspectives on Investment in Human Skill Development," Proceedings of the National Academy of Sciences. 103(27): 10155-10162.
  • 15. What did they do? • By conducting a cross-disciplinary examination of independent research in economics, developmental psychology, and neurobiology, they discovered a striking convergence of four core concepts that explain the effects of early environment on the capacity for human skill development.
  • 16. Effects of early environment on capacity for human skill development 4 core concepts neurobiology Developmental psychology economics
  • 17. 4 Core Concepts 1. Environments affect genetic expression mechanisms influencing a) Architecture of the brain b) Process of skill formation 2. Mastery of job related skills and the underlying neural pathways follow hierarchical rules in a bottom-up sequence 1. Cognitive, linguistic, social and emotional competencies are interdependent and are shaped by the experiences of the developing child in addition to innate ability 4. Human abilities are formed in a predictable sequence of sensitive periods during which the development of neural circuits are most plastic and optimally receptive.
  • 18. Early experiences shape. . . Temperament and Social Development Perceptual and Cognitive Abilities Brain architecture Gene expression and neurochemistry Adult Productivity
  • 19. Poverty Poisons the Brain • “Toxic” stress hormone levels are higher in young children from poor families • Excessive levels of toxic hormones disrupt the formation of synaptic connections between cells in the developing brain—and even effect its blood supply, and literally disrupt the brain architecture. • Stress-management systems are compromised increasing the risk of stress related physical and mental illnesses well into the adult years.
  • 20. Heckman’s Role • Departed from previous economic models of adult productivity by recognizing : – the importance of both cognitive and noncognitive abilities (motivation, self-control, time preference) in explaining schooling and academic success; – Abilities are produced by genes and environments (moms are special) – Childhood has more than one stage—early versus late. – Skill formation is a lifetime process starting in the womb and continuing throughout life. • Families play a far more important role in developing skills than schools. • There are multiple skills and multiple abilities that are important for adult success.
  • 21. Lessons from program evaluations • Early investment facilitates the productivity of later investment--Skill begets skill through a multiplier process. • Early investments are not productive if they are not followed up by later investments. • Returns to investing early in the life cycle are high. • Remediation of inadequate early investments is difficult and very costly.
  • 22. Returns to investing in early childhood
  • 23. Policy Recommendations • “The most cost-effective strategy for strengthening the future of American workforce is to invest greater human and financial resources in the social and cognitive environments of children who are disadvantaged, beginning as early as possible.” • Early childhood education is an economic development strategy. • Neglecting the early years creates an underclass that is growing in the U.S.
  • 24. Forms of Investment • Health care programs – Prenatal programs for disadvantaged moms – Preventative well-baby visits – Immunizations – Nutrition programs • Parenting courses and other home interventions programs – Harlem Children’s Zone Baby College • Child development programs – Halem Gems—all day pre-K .
  • 25. Application of Findings Worldwide • Number of poor children in the world: 1 billion (every second child) • For the 1.9 billion children from the developing world, there are: – 640 million without adequate shelter (1 in 3) – 400 million with no access to safe water (1 in 5) – 270 million with no access to health services (1 in 7) – 510 million underweight or stunted (1 in 4) • 15 million children orphaned due to HIV/AIDS (similar to the total children population in Germany or United Kingdom) • 121 million children are out of education worldwide Source: http://www.globalissues.org/article/26/poverty-facts-and-stats
  • 26. Another Example of Multi-disciplinary Research Amsterdam Institute of International are targeting Millennium Development Goal 6: – By 2015 have halted and begun to reverse the spread of HIV/AIDS. – Fellows and research staff representing no fewer than nine traditional disciplines • http://www.aiid.org/index.php?ap=fellows – Research on AIDS • http://www.aiid.org/index.php?ap=zoek&sp=10
  • 27. Eric I. Knudsen • Research Interests—the mechanisms of attention, learning and strategies of information processing in the central auditory system of developing and adult barn owls, using neurophysiological, pharmacological, anatomical and behavioral techniques. Studies focus on the process of sound localization. Sound localization is shaped powerfully by an animal's auditory and visual experience. Experiments are being conducted to elucidate developmental influences, extent and time course of this learning process, and its dependence on visual feedback. The cellular mechanisms that underlie this example of learning are being studied to determine how experience adaptively alters the anatomical, pharmacological and functional properties of the brain in developing and adult animals. In addition, we study mechanisms of attention (gain control of sensory responses) and the rules by which auditory and visual information is combined into a single representation in the brain. Techniques offered in this laboratory include acoustic stimulation, extracellular recording, microstimulation, neuropharmacology, immunohistochemistry, anatomical pathway tracing, and behavioral analysis.
  • 28. James J. Heckman • Heckman’s work has been devoted to the development of a scientific basis for economic policy evaluation, with special emphasis on models of individuals and disaggregarted groups, and to the problems and possibilities created by heterogeneity, diversity, and unobserved counterfactual states. • He has developed a body of new econometric tools that address these problems and possibilities. He established a strong causal effect of the 1964 Civil Rights Act on promoting African-American economic progress. • He established that GEDs are not the equivalent of high school graduates and perform only slightly better than high school dropouts who do not exam certify. • His recent research focuses on human development and lifecycle skill formation, with a special emphasis on the economics of early childhood. He is currently conducting new social experiments on early childhood interventions and reanalyzing old experiments.
  • 29. Judy L. Cameron • Generally, Cameron’s studies the effects of stress from everyday life on long-term health and is interested in the relationship between physical health and mental health. • Specifically, Dr. Cameron's laboratory studies the effects of various physiological stresses (brief periods of undernutrition, moderate exercise, and mild psychological stress) on neuronal activity in the central nervous system. Studies utilize nonhuman primates as experimental models and aim to understand how exposure to common stresses impact on the brain and the systems it controls, including reproductive function, emotion regulation, metabolic regulatory systems and motor control. Experimental approaches include physiological and pharmacological studies with chronically instrumented animals, behavioral studies, identification of neural circuits by immunocytochemical and in situ hybridization technologies, and genetic studies.
  • 30. Jack P. Shonkoff • Jack P. Shonkoff, M.D., chairs the National Scientific Council on the Developing Child, a multi-university collaboration comprising leading scholars in neuroscience, developmental psychology, pediatrics, and economics, whose mission is to bring sound and accurate science to bear on public decision-making affecting the lives of young children. He is an academic pediatrician whose work focuses on early childhood health and development and the interactions among research, policy, and practice.