Can Preschoolers Save Our Economy?

We all know the basic elements of an economic development plan: Entice companies to locate in your town or city, create industry and retail friendly zones, promote tourism, and pump up public-private partnerships.

But if you really want to see high returns on the investment of public funds into our economy it might be time to start thinking a little less about opportunity zones and a lot more about preschools.

That’s what Arthur J. Rolnick, senior fellow and co-director of the Human Capital Research Collaborative at the University of Minnesota’s Humphrey School of Public Affairs, believes. I heard him speak at the recent meeting of the 2013 Robert Wood Johnson Foundation Commission to Build a Healthier America in Washington D.C., where experts testified on improving early childhood development to boost the health of our nation.

What does that have to do with the national economy? The link between health and early childhood development has become increasingly clear, with a growing body of evidence showing that toxic stress and other adverse experiences can affect the brain development of children, which in turn affects their economic productivity as adults.

The scientific research may be new, but the theory isn’t. And it certainly doesn’t apply only to the United States.

According to a recent article in the New York Times by economist and Nobel laureate Amartya Sen, Japan successfully resolved in 1868, during the Meiji Restoration, to focus on the education and the health care of its people in order to catch up with the economic development of Europe. It did so again after World War II. In fact, Sen argues, poor public health care and poor education, and the lack of public investment in both, are historic reasons that India’s economic growth rate may never be a robust as China’s.

If we want to improve the health and the economic well-being of Americans, it would be wise to start with the youngest and most vulnerable among us.

In his testimony, Rolnick pointed to research indicating that investments in early childhood development made by governments in partnership with private firms and nonprofit foundations can produce “extraordinarily high economic returns” with “benefits that are low-risk and long-lived.”

His examples included cost-benefit analyses of several model preschool programs that have followed the lives of students well into adulthood. Programs such as the Perry Preschool Program in Michigan, North Carolina’s and the Chicago Child-Parent Centers have demonstrated that giving children educational support from birth until the age of 5 makes a significant difference.

“Without support during these early years, a child is more likely to drop out of school, depend on welfare benefits, and commit crime, thereby imposing significant costs on society,” Rolnick said.

The studies showed returns that ranged from $3 to $17 for every dollar invested in early childhood development programs. When adjusted for inflation, that translates into 7 to 18 percent.

“You won’t find a better investment,” Rolnick told the Commission.

I absolutely agree.

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