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Tuesday, January 10, 2006

Heckman: Investing in Disadvantaged Children is Fair and Efficient

James Heckman, Nobel laureate in economics in 2000 and a professor at the University of Chicago makes the case for early childhood intervention:

Catch 'em Young, by James J. Heckman, Commentary, WSJ: It is a rare public policy initiative that promotes fairness and social justice and, at the same time, promotes productivity in the economy... Investing in disadvantaged young children is such a policy. The traditional argument for providing enriched environments for disadvantaged young children is based on ... fairness and social justice. But another argument can be made that ... is based on economic efficiency, and it is more compelling 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. Early interventions ... promote schooling, raise the quality of the work force, 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% to 17%. ...

Families are the major source of inequality in American social and economic life. The accident of birth has substantial lifetime consequences. Adverse early environments are powerful predictors of adult failure on several social and economic dimensions. ... Experimental interventions that enrich early childhood environments ... produce more successful adults by raising both cognitive and noncognitive skills. At current levels of spending, early interventions targeted toward disadvantaged children have much higher economic returns than later interventions, such as reduced pupil-teacher ratios, public job training, convict rehabilitation programs, tuition subsidies or expenditure on police. ...

Moving persons from the bottom to the top of either cognitive or noncognitive distributions has equally strong effects on many measures of social and economic success. Gaps in rankings of both cognitive and noncognitive ability by socioeconomic status emerge early in the life of the child, widen slightly in the early years of schooling, and stay constant after age eight. Research shows that schooling and school quality play only a small role in accounting for these gaps ... Controlling for early family environments narrows the gaps greatly. Family environments are major predictors of adult cognitive and noncognitive abilities. ...

Although much public policy discussion focuses on the failings of schools, a major finding from the research literature is that schools ... contribute little to the emergence of test-score gaps among children. By the second grade, gaps ... across socioeconomic groups are stable ... [T]he abilities and motivations that children bring to school play a far greater role ... than do the traditional schooling input measures that receive so much attention in public policy debates. ...

Many politicians and citizens place their faith in adolescent and young-adult remediation programs. ... However, the track records of criminal rehabilitation programs, adult literacy programs and public job-training programs are poor. ... Studies ... show that later compensation for deficient early family environments is very costly. ... If society waits too long to compensate for the accident of birth, it is economically inefficient to invest in the skills of the disadvantaged. A serious trade-off exists between equity and efficiency for ... adolescents and young adults. There is no such trade-off for policies targeted toward disadvantaged young children.

Important operational details of investment programs for disadvantaged children remain to be determined. Children from advantaged environments, by and large, receive substantial early investment, while children from disadvantaged environments more often do not. There is little basis for providing universal programs at zero cost, although some advocate such a policy. While there is a strong case for public support for funding interventions in the early childhood of disadvantaged children, there is no reason for the interventions to be conducted in public centers. Vouchers that can be used in privately run programs would promote competition and efficiency in the provision of early enrichment programs. They would allow parents to choose the venues and values offered in the programs that enrich their child's earliest years.

We have school choice here. You can send your child to any elementary, middle, or high school in town, any immersion or magnet school, charter school, and so on (rules for school choice, there are lotteries for some schools). This has caused a heated debate as to whether the program should continue unmodified as there is evidence that schools are now more segregated economically due to school choice. Children with resources tend to leave neighborhood schools more often than students with fewer resources, but even within the same school where there is an immersion and traditional school residing in the same building, such separation exists.

After seeing something resembling a voucher system in action here (private schools are not part of it, but it does set up competition through choice and it's been in place a long time), I am not sold on the virtues of vouchers for those from lower income households. If the few students in poorer neighborhoods with resources use their vouchers to leave in disproportionate numbers, the stratification becomes worse, not better. When I first moved here, my kids were in the second poorest school in town by state demographic measures, though they didn't stay long. It had an alternative school and a regular school housed in separate wings of the same building and the disparity between the two schools in almost every dimension was very evident. The kids knew the difference. The steps involved in enrolling a student in the alternative school seemed to be enough to allow the enclave to develop.

We need to do more, and I think Heckman may be right, perhaps it is a problem of being from a disadvantaged family - around here one disadvantage is parents who do not or cannot take action to find better schools for their kids (resource constraints restrict choice for some families, e.g. transportation to school and after school care, etc., though that is less of an excuse in the co-habitating programs).

How will we get those parents who define disadvantaged families to use the vouchers? That vouchers "allow parents to choose the venues ... that enrich their child's earliest years" sounds good, but that is not how I've observed it working in practice. Allowing parents to do something does not mean they will actually do it. It may be necessary to do more than hope that children, through the vouchers in their parent's hands, will find their way to the programs they need.

Update: Cleveland Fed president Sandra Pianalto gave a speech today on "Early Childhood Education and Our Economic Future."

    Posted by on Tuesday, January 10, 2006 at 12:33 AM in Economics, Income Distribution, Policy | Permalink  TrackBack (0)  Comments (9)


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