When education professionals talk about investing in our youth, there’s often a fair amount of eye-rolling among fiscal conservatives, who might interpret such pleas as teachers’ attempts to feather their own nests or a government’s ploy to exert further control over taxpayers.
In the hard-boiled business world, after all, an “investment” is just that – an infusion of capital intended to bring about a future windfall.
So when a think tank releases a study purporting to show that an initial $20 million investment in early childhood education would bring $60 million per year in future economic benefits, many skeptics will be tempted to dismiss it out of hand.
| “[The study] gives many of us an opportunity to help engage business leaders in a more formal discussion about the critical importance of quality early education.” – Jim Leonhart, Celebrate Children Foundation |
What makes this study just a bit different, however, is that it was commissioned by the Wisconsin Policy Research Institute (WPRI), a right-leaning, free market-focused think tank headed by George Lightbourn, who served as former Gov. Tommy Thompson’s secretary of administration.
“We found it amazing, in fact, that this conservative think tank would see the value in early education like this, and we hope it … gives many of us an opportunity to help engage business leaders in a more formal discussion about the critical importance of quality early education,” said Jim Leonhart, executive vice president of the Celebrate Children Foundation, which is part of the implementation team for the state’s YoungStar program, a rating system for child care centers.
“Here we have a conservative think tank thinking like this, and we would hope that business leaders in the state would tend to agree with this. And we know there are issues with the fact that we’ve got to retrain workers and get them prepared for what businesses want to do, but in the long run we really need to go back and get this front end fixed.”
The YoungStar program, which assigns star ratings to child care providers in the state and gives providers tools and training to help them achieve higher ratings, is the focus of the WPRI report, which is titled “The Economic Power of Early Childhood Education in Wisconsin” and was authored by Rob Grunewald, an economist with the Federal Reserve Bank of Minneapolis, and Don Bezruki, retired program evaluation director of Wisconsin’s Legislative Audit Bureau.
In the study’s introductory notes, Lightbourn noted what he called one of the study’s most troubling findings: that 65% of low-income children in the state attend the lowest-rated two-star early childhood centers, while only 14% attend higher-rated centers. WPRI asked the study’s authors to estimate what would happen if half the children in two-star centers were moved to four- or five-star centers – a calculation that resulted in the $60 million annual ROI cited above.
“I think the most important takeaway [from the study] is that Wisconsin is positioned pretty well to take advantage of the economic development potential of early childhood education, but only if it makes some hard decisions going forward,” said Lightbourn. “And so a couple of things in the report are, there are many more children in lower-rated early childhood centers than the state had anticipated when they established the [YoungStar] program, so there’s a need to move more of the children into higher-rated centers.
“And the only way that we’re going to maximize the economic potential of early childhood education is to get more of the children into those higher-rated centers, and that’s going to require some changes in the program to encourage more centers to increase their rating or to encourage more parents to send their kids to higher-rated centers.”
An engaged business community
While Lightbourn notes that moving more children into higher-rated child care centers would not necessarily require a greater public investment than is currently provided for through existing subsidy programs, the WPRI study did outline several strategies for improving the return on investment.
Those included increasing parental involvement, evaluating the potential for quality improvement among existing providers, and significantly increasing business community support and participation.
It’s on this last point that child welfare advocates like Leonhart and the business community will likely find common ground.
“I think [the business community] has an important role, multiple roles,” said Lightbourn. “The state government’s business organization, which is headed by Paul Jadin, has to become involved in this early childhood program. Secondly, in many settings … business has been an investor in early childhood education, so they’ve been side by side with government. So it’s not just a government subsidy; businesses are involved in funding these centers because the payback comes back to them.”
That point is echoed in the study itself, which sees the benefit to business of early childhood education as particularly significant and wide-ranging.
“Economic research suggests that Wisconsin’s current and future investments in early childhood education can boost long-run labor force productivity, reduce costs to government and society, and produce near-term effects on local economic development,” said the study’s authors. “Investments in human capital are key to increasing labor productivity, that is, the amount produced per hour worked. Strong labor productivity in turn supports economic growth.”
What about brain drain?
Of course, one possible objection to pouring resources into early childhood education involves the so-called “brain drain.” It may be true that a strong business focus on enriched child care programs helps kids, but will it really help state businesses if all those future workers leave the state to take jobs in states where education is not so sacrosanct?
For his part, Lightbourn says there’s no reason to believe that the benefits realized through early childhood education would be eroded by outward mobility.
“No, in fact, I look at it as just the opposite,” said Lightbourn. “One of the things we know for certain is that lower-income people have less mobility than the rest of the population, which means that if you have an embedded lower-income population in Madison or Milwaukee or Green Bay, they’re not going anywhere. They’re going to be lower-educated and having an increasingly difficult time contributing to the economic viability of their area. So if you don’t increase the educational aptitude of the low-income population, you have to live with the results for a long time.”
As critics point out, those results are often not what they should be – and when it comes to return on investment, they’re particularly poor.
“We’re already investing a lot of money in remedial education and special education and juvenile delinquency costs when young people aren’t prepared for the challenges of school and work life,” said Leonhart. “I make the argument that this money is already being spent, and we could redirect it to the front end bit by bit and help figure out that there is probably funding available to make this work in the long run. So again, I think as a social benefit, this has tremendous value, and Wisconsin ought to be working as one of the leaders on it.”
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