The Economic Case for School Readiness

“… there are some policies that both are fair—i.e., promote equity—and promote economic efficiency. Investing in the early years of disadvantaged children’s lives is one such policy.”

“Parents need help and their children will suffer if they don’t get it. Society will pay the price in higher social costs and declining economic fortunes.”
James J. Heckman | The Economics of Inequality: The Value of Early  Childhood Education

There have been a number of landmark studies that sought to answer the question of what is the true rate of return on investment for early childhood development programs. The Perry Preschool Project, the Abecedarian Project, and a number of others have all sought to put a dollar value on the benefits of early childhood education. While their exact numbers vary depending on the program and computational models used, they all come to pretty much the same conclusion: our society gets the most “bang for its buck” when it invests in programs that help children lay a solid foundation for success. A good summary of these studies can be found here.

The child care industry itself has a signficant impact on our economy here in South Carolina. According to a 2006 report prepared by Dr. Donald Schunk of the University of South Carolina the child care industry in South Carolina has an estimated $787.2 million impact on the state’s economy, comparable to the newspaper publishing industry, the TV/radio industry and the poultry and egg industry.

 

Art Rolnick holds a PhD in Economics and is a former Senior Vice President of the Federal Reserve Bank of Minneapolis. In this TED talk he shares why the way most people in the economic development business are going about it is all wrong, and why the smart money is on early education.

  About School Readiness