Why Invest in Early Childhood?

At a recent conference in Washington, D.C. (March 7, 2007), over 200 business leaders, policymakers, and members of the nonprofit community met to discuss how investments in children can improve America’s workforce and future economic standing in the global community. This third annual conference was sponsored by the Committee for Economic Development and was entitled:  Building the Economic Case for Investments in Children with the primary goals being (1) to assess the emerging evidence on the economic impact of investments in children and (2) to equip business leaders and economists with the research and tools they need to inform discussions about investments in programs that help children succeed in life and grow to be productive citizens.

The Committee for Economic Development (http://www.ced.org/) has focused on early childhood because of the strong link that has been shown between success in the workforce and proven programs for young children.  The economic benefits of investing early in children’s development have been demonstrated by many researchers, including Nobel Laureate Dr. James Heckman.

“Early childhood investments of high quality have lasting effects…. We cannot afford to postpone investing in children until they become adults, nor can we wait until they reach school age — a time when it may be too late to intervene. Learning is a dynamic process and is most effective when it begins at a young age and continues through adulthood. The role of the family is crucial to the formation of learning skills, and government interventions at an early age that mend the harm done by dysfunctional families have proven to be highly effective.”
Nobel Prize-winning Economist James Heckman -
University of Chicago

There is strong evidence now to suggest that investments made in the early years of a child’s life result in better returns than those made later on.  Specifically, economic analyses conducted by Heckman and colleagues revealed that a dollar invested in early childhood (0-6 years) yields three times as much as for school-aged children (6-18 years) and eight times as much as adult education (over 18 years).   In addition to direct economic benefits, early investments in child development programs help to overcome socioeconomic disparities by leveling the playing field for all children before they enter school and increase the chances that children will be successful in school from the start, thereby reducing the need for educational interventions and school drop-out rates.  

Long-term studies of the following programs showed tremendous benefits from investing in early childhood development:

• Perry Preschool Project (Ypsilanti, Michigan)
• Prenatal/Early Infancy Project (Elmira, New York)
• Abecedarian Early Childhood Intervention (North Carolina)
• Chicago Child-Parent Center Program (Chicago, Illinois)

Each of these programs compared children participating in the program with comparable children not participating in the program, controlling for socioeconomic status. These studies found that children who participated in high-quality ECD programs tended to have:

• higher scores on math and reading achievement tests
• greater language abilities
• less grade retention
• less need for special education and other remedial work
• lower dropout rates
• higher high school graduation rates
• higher levels of schooling attainment
• improved nutrition and health experienced less child abuse and neglect8

While it is difficult to fully capture all of the benefits of the program (e.g., long-term improvements in health, reduction in child abuse and neglect), the benefit-cost ratios varied from a minimum of 3.78 to 1 (Abecedarian) to 17.01 to 1 (Perry Preschool).  That is, every dollar invested in these ECD programs generated $3.78 or more in benefits.

How does Canada Measure up in Spending on ECD?

A recent study completed by the Organisation for Economic Co-operation and Development (OECD) revealed that Canada currently spends less on early learning and child care than any other developed country in the world (CRRU, Briefing Notes ref, 2007).  Public spending in Canada on early learning and child care programs for children 0-6 years was 0.25% of Gross Domestic Product (GDP), while the United States spent 0.48% of GDP and Denmark spent 2% of GDP.  The OECD team provided several detailed observations regarding Canada’s early childhood situation (OECD Canada report, 2004). These data suggest that Canada’s current investment in child development and early learning could be improved.