The economics of multisystemic resilience

Abstract

The concept of resilience in the economic literature is centered around the capacity to overcome adverse circumstances and to mitigate the impacts of shocks through the development of human capital starting in early childhood. In this chapter, the authors review the existing evidence on multisystemic resilience in economics, from both a micro- and a macroperspective. To do so, they first introduce the theory of human capital development and the large body of empirical evidence about early interventions that seek to boost resilience in children. They then discuss two more recent strands of literature: one that examines whether subsequent investments can offset the effects of early-life shocks and another that uses micro-founded macroeconomic models to understand the indirect (multisystemic) effects of early interventions.