Investing in Disadvantaged Young Children is an Economically Efficient Policy

Why should society invest in disadvantaged young children? The traditional argument for doing so is made on the grounds of fairness and social justice. It is an argument founded on equity considerations.

There is another argument that can be made. It is based on economic efficiency. It is more powerful than the equity argument, in part because the gains from such investment can be quantified and they are large. There are many reasons why investing in disadvantaged young children has a high economic return.

It is a rare public policy initiative that promotes fairness and social justice and at the same time promotes productivity in the economy and in society at large. Investing in disadvantaged young children is such a policy.

Early interventions for disadvantaged children promote schooling, raise the quality of the workforce, enhance the productivity of schools and reduce crime, teenage pregnancy and welfare dependency. They raise earnings and promote social attachment. Focusing solely on earnings gains, returns to dollars invested are as high as 15-17%.