The Economic Payoff of Early Childhood Intervention

By Laura D’Andrea Tyson
We all know, or at least we should know, that support for a society’s most vulnerable members can go hand in hand with economic growth. To the extent that a society fails to invest in its children, especially children trapped in poverty, it loses some of its potential for future growth.

What isn’t so obvious, however, is the magnitude of the economic pay-off from relatively low-cost early support for children at risk.

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That’s why a new study co-authored by Paul Gertler of Berkeley-Haas is attracting so much attention – in less than a year, it has already been cited in 18 other papers.

Following up on children who had taken part in a Jamaican early-childhood intervention program 20 years ago, Gertler and his colleagues found that the modest efforts back then yielded a 25 percent increase in the incomes of children when they reached adulthood.
That is an extraordinary finding.

We already have evidence of economic benefits from preschool support for children in the United States. But we didn’t know much about the impact in developing nations, and this study shows that the benefits in those countries are even more dramatic than the benefits here.

The numbers are big. In developing nations, more than 200 million children below the age of five are in such dire poverty that they are at serious risk of not reaching their full development potential. They are at risk of not getting the stimulation and support for learning from their families, and that deprivation can them back for the rest of their lives.

But Gertler and his colleagues found that modest, low-cost interventions made a big change on the children’s trajectories.

The researchers began by tapping into a Jamaican study of early intervention for stunted children in 1986 and 1987. About 129 children took part in weekly, one-hour play sessions over a two-year period. The play sessions were led by trained community health workers and were designed to provide children with the kind of stimulation that promotes learning. The workers also trained parents in providing support.

To gauge the long-term results, Gertler and his colleagues tracked down and interviewed almost all of the children who taken part in the study – 105 of the 129 children. For comparison, they also tracked down and interviewed 65 children who did not get the support but were surveyed as well in 1986.

The findings: as young adults, the stunted children who had received help had incomes about 25 percent higher than the children who received no help. The children who took part in the play sessions spent more years in school and were more likely to stay in school while holding jobs. In addition, the stunted children caught up with the performance of non-stunted children. By contrast, the stunted children who got no help continued to lag behind.

The researchers found that parents of the children became more actively invested in their children’s development. In fact, parents of the children who received support were more likely to move to a different country in search of better schools.

“As children exited the intervention period,’’ the researchers wrote, “parents may have realized that investments such as schooling had higher returns than they might otherwise have thought.”

Intuitively, it makes sense that children who get support in those very early years will do better later on. What makes this study remarkable, however, is that the researchers were able to make a solid causal connection between that early support and a person’s economic potential later in life.

Over a person’s lifetime, that impact translates into enormous increases in total income for an individual. Society as a whole benefits as well: higher productivity in the work force; better health; lower government spending on social safety-net programs.

We live in an era when many people are convinced that government programs do no good. But the cost-benefit ratio of these efforts is spectacular.

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