High-Quality Early Education Boosts Human Capital

High-Quality Early Education Boosts Human Capital

August 18, 2011 by Irene Sege

What investment addresses three common “beefs” of business owners? To economist Timothy J. Bartik of the Upjohn Institute, the answer is investing in early childhood education, according to an issue brief from the Partnership for America’s Economic Success, a project of the Pew Center on the States.

Here’s why, from the brief, “Attracting, Developing and Maintaining Human Capital: A New Model for Economic Development.”

“Lack of talent – Early learning improves productivity today and cultivates the skills of tomorrow’s workforce.

“Reactive budgeting – Early education helps reduce taxpayer expenses for special education, crime and other costly problems.

“Too few customers – Early learning leads to higher incomes and greater wellbeing for those least well-off, creating a stronger consumer base.”

The brief summarizes the case for high-quality early education that Bartik builds in his 2011 book “Investing in Kids: Early Childhood Programs and Local Economic Development,” The benefits of high-quality early education, particularly for children from low-income families, include:

• “Savings of up to $3,700 per child to school systems over the K-12 years;
• Reductions in special education placements of nearly 50% through second grade and grade repetition of as much as 33% through eighth grade; and
• Crime-related cost savings of between $2 and $11 per dollar invested.”

“These benefits from investments in young children accrue to the entire community, which in turn supports business by improving the operating environment and expanding the consumer base,” the brief states.

Noting that 60% of U.S. employees – including 45% of college graduates – live and work in the state where they grew up, Bartik says that substantial benefits accrue to communities and states that invest in high-quality early education.

“As the economy grows, human capital needs will be even greater,” the brief concludes. “Well-designed incentives and proven early childhood programs provide a powerful one-two punch that builds human capital and produces a winning economy.”