In a series of papers with distinguished co-authors, I have developed the case for intervening in the lives of disadvantaged children. This paper reviews the arguments developed in Cunha, Heckman, Lochner and Masterov (2006), Heckman and Masterov (2007) and Heckman (2000, 2008).

This body of research examines the origins of inequality and analyzes policies to alleviate it. Families play a powerful role in shaping adult outcomes. The accident of birth is a major source of inequality. Recent research by Cunha and Heckman (2007a) shows that in American society, about half of the inequality in the present value of lifetime earnings is due to factors determined by age 18. It is possible that the figure is as high or even higher in Western Europe because labor market inequality is lower there. Compared to 50 years ago, a greater fraction of American children is being born into disadvantaged families where investments in children are smaller than in advantaged families. Growing unassimilated immigrant populations in Western Europe create similar adverse trends there. Policies that supplement the child rearing resources available to disadvantaged families reduce inequality and raise productivity.