And each type of relationship -- from beginning to end -- gets its own degree of life cycle experience.
As noted above, deciduous trees with yearly life cycles experience a period if intensified growth in the spring.
Estimates that do not account for the endogenous determination of these three life-cycle experiences are misleading.
For verbal skills, however, this estimated effect is halved if IV estimates are used for school attainment, whether or not the other life-cycle experiences are included.
For the final specification with all three life-cycle experiences, we also present IV limited information maximum likelihood (LIML) results using the same set of excluded instruments.
Without controls for the endogenous determination of the life-cycle experiences, the effects of HAZ at age 6 years and of skilled job tenure on adult nonverbal skills appear to be substantially underestimated.22.22
For the full specifications with all three life-cycle experiences (Set 3), the first- and second-stage diagnostics are satisfactory for both types of skills; the instruments we utilize have reasonable power and we fail to reject the overidentification tests.
Our preferred estimate for the school attainment coefficient from the IV-GMM estimates, with all three life-cycle experiences included, is 0.09 SD in verbal skills for every additional grade, or approximately 0.30 SD in verbal skills for a 1 SD increase in school attainment.
The endowments and the actual or expected values of the family, community, and stochastic factors for the three life-cycle stages are all on the right side of each of the reduced-form demand relations for each individual life-cycle stage (relations 4, 5, and 7) and, therefore, the three life-cycle experiences are likely correlated.
For nonverbal skills, the combination of including post-school experience and treating all three life-cycle experiences as behaviorally determined results in a decline in the estimated coefficient on school attainment to 0.04 SD for every additional grade, and it is no longer statistically significant.
Therefore, our preferred estimates with all three life-cycle stages treated as endogenous indicate a substantial gain from higher HAZ at age 6 years in terms of both verbal and nonverbal skills more than 20 years later, controlling for both school- and post-school experiences and for the endogenous determination of all three of these life-cycle experiences.
