Beyond GDP: The Importance of High-Quality Early Childhood Education and Care

Beyond GDP: The Importance of High-Quality Early Childhood Education and Care

Traditionally, a country’s Gross Domestic Product or GDP has been the dominant metric of its progress, but in the last couple of decades, a number of objections have been raised against its use as a measure of economic and social advancement. Among the principal ones are that GDP overlooks economic activity such as household work or the work of a stay-at-home parent, does not factor in the environmental impacts of economic decisions, and offers no account of economic inequality so that much of society might be worse off even as it gets richer. In the light of these objections, a number of new indices of progress have appeared on the scene, such as The Legatum Institute’s Prosperity Index and The Social Progress Imperative’s Social Progress Index. These new indices include purely economic measures such as per capita income but also factor in such variables as governance, personal safety and security, education, health, social inclusion and ecosystem sustainability.


One missing element, however, in these new indices is the contribution of households to economic production. This might be understandable given that few countries have attempted to evaluate the goods and services that are typically exchanged inside of a household. And yet, this fact may hide a deeper misconception, which is that the household has traditionally only been viewed as a site of consumption. But, as authors like Riane Eisler (in Real Wealth of Nations: Creating a Caring Economics, 2008) have pointed out, the household is a crucial site of production as well. The functions performed in a household are those of caring and care-giving, and these are productive functions because they create and nurture human capital.


It is becoming increasingly obvious, as we look around the globe and inquire into the growth trajectories of countries, that high-quality human capital is the critical ingredient of prosperity for both individuals and nations. But what is often missed is how important early childhood education and care are for the production of high-quality human capital. For it is the case that human capital is not only the product of secondary and tertiary education, as is conventionally understood, but also the product of early childhood care and pre-primary education (for children aged 0-5 years). Neuroscience research informs us that the quality of early childhood care is critical to the human being’s capacity for social, emotional, cognitive, and physical development. So high-quality human capital is really a work-in-progress from the very beginning of a person’s life and especially during the early years.


Research shows that much of the inequalities that we see in our societies today can be traced to inequalities in early childhood development. US economist and Nobel Prize winner James Heckman and his colleagues have analyzed many long-term studies of early human development and the impact in terms of adult outcomes of investment in early schooling. They find that inequality in early childhood learning experiences produces inequalities in ability, achievement, health, and professional and personal success in adulthood. Adverse impacts of genetic, parental, and environmental resources can be overturned through investments in high-quality early childhood education. Investment in early education for disadvantaged children from birth to age 5 helps reduce the achievement gap, reduce the need for special education, increase the likelihood of healthier lifestyles, lower the crime rate, and reduce overall public costs.


In the same vein, research performed by the National Institute for Early Education Research at Rutgers University in the US has demonstrated that investments in high-quality early childhood education and care lead to greater educational success and higher economic productivity through higher achievement test scores, lower rates of special education and grade repetition, higher rates of high school graduation, fewer behavior problems such as delinquency and crime, greater chance of employment, higher lifetime earnings, lower dependency on welfare, and lower incidences of smoking, drug use, and depression. Further, investments in high-quality early childhood education lead to decreased costs to government through lower schooling costs, lower social services costs, lower crime costs, and lower healthcare costs (in part through lower rates of teen pregnancy and smoking).


It would appear, therefore, that public investments in high-quality early childhood education and care delivers significant efficiency gains in the short, medium, and long runs. But what is even more noteworthy is that such investments also solve problems of inequality. That is, even though the equity-efficiency trade-off is a pervasive feature of debates (and deadlocks) on how to address inequality in market-based systems, it appears that in the arena of early childhood education and care, such a trade-off does not in fact exist. The evidence for the US has already been cited, but similar evidence is also available from programs in other countries such as the UK, Denmark, France, Norway, Germany, Sweden, Argentina and Uruguay. In all of these countries, research has demonstrated that the positive effects of high-quality early childhood education and care are disproportionately greater for children from less-advantaged backgrounds.


All of this suggests that even the newer measures of economic and social progress such as the Social Progress Index are missing a critical ingredient – and also, that for a country like India, which has the world’s largest youth population (350+ million 10-24 year olds), the economic benefits of public investment in high-quality early childhood education and care will be monumental and far-reaching. 

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