Wednesday, May 21, 2008
What Does Economics Tell Us About Early Childhood Policy?
An increasing chorus of Fortune 500 CEOs, Federal Reserve Bank analysts, Nobel Prize-winning economists, and other business and economic leaders have led the call to increase public “investments” in early childhood. This call is driven by research findings that increasingly emphasize the importance of laying a strong foundation in early childhood and that show that a range of early interventions can successfully put children on the path toward positive development, preventing poor outcomes in adulthood. These findings — along with increasing recognition in the public-health and social-service sectors that providing program services in early childhood has benefits over treatment later in life — have contributed to the evolution of economists' support for early childhood investments.
To help decisionmakers in the public and private sectors, service providers, and the public more generally, RAND researchers drew on their decades-long expertise in applying economics to early childhood issues to demonstrate how two economic concepts — human capital theory and monetary payoffs — contribute to a unifying framework that provides evidence-based guidance for early childhood policy. These concepts are summarized in this research brief.
Perhaps the most widely recognized intersection between economics and early childhood policy is the analysis of the costs and benefits of early childhood programs and related analyses that describe the rate of return on investments in early childhood programs.
The fundamental insight of economics is manifested in a growing body of program evaluations that shows that early childhood programs can generate government savings that more than repay their costs and produce returns to society that outpace most public and private investments.
