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The Economic Case for Investments in Young Children Rob Grunewald Federal Reserve Bank of Minneapolis
Educational Characteristics of the Labor Force Millions of Workers Age 25 and Over Source: Ellwood (2001)
Four Numbers to Remember <ul><li>700 per second </li></ul><ul><li>18 months </li></ul><ul><li>2:1 ratio </li></ul><ul><li>...
Human Brain  at Birth 6 Years Old 14 Years Old
Human Brain Development Synapse Formation Dependent on Early Experiences  FIRST YEAR -8 -7 -6 -5 -4 -3 -2 -1  1 2 3 4 5 6 ...
Barriers to Social Mobility Emerge  at a Very Young Age 16 mos. 24 mos. 36 mos. Cumulative Vocabulary (Words) College Educ...
Risk Factors for Adult Substance Abuse are Embedded in Adverse Childhood Experiences 0 2 4 6 8 10 12 14 16 0 1 2 3 4 Self-...
Risk Factors for Adult Depression are Embedded in Adverse Childhood Experiences   Odds Ratio ACEs Source: Chapman et al, 2...
Risk Factors for Adult Heart Disease are Embedded in Adverse Childhood Experiences   ACEs Source: Dong et al, 2004 Odds Ra...
High/Scope Study of Perry Preschool <ul><li>In early 1960s, 123 children from low-income families in Ypsilanti, Mich.  </l...
Perry: Educational Effects Source: High/Scope Educational Research Foundation
Perry: Economic Effects at Age 40 Source: High/Scope Educational Research Foundation
Perry: Arrested 5 or More  Times Before Age 40 Source: High/Scope Educational Research Foundation
Perry: Average Number of Months  Served in Prison by Age 40 Source: High/Scope Educational Research Foundation
Perry Preschool Costs and Benefits Over 62 Years   Source: High/Scope Educational Research Foundation
Perry Preschool —  Estimated Return on Investment <ul><li>Benefit-Cost Ratio = $16 to $1 </li></ul><ul><li>Annual Rate of ...
Abecedarian, Educational Child Care   <ul><li>Full-day, year-round program near Chapel Hill, N.C.  Children from low-incom...
Abecedarian: Educational and  Health Effects Source: Carolina Abecedarian Study
Chicago Child-Parent Centers   <ul><li>Half-day, large-scale program in Chicago public schools. Comparison group was a sam...
Chicago Child-Parent Centers Source: Arthur Reynolds, et al.
Elmira Prenatal/Early Infancy Project Higher-Risk Families  <ul><li>Home visiting program by registered nurses for at-risk...
Elmira Prenatal/Early Infancy Project High-Risk Families Source: David Olds, et al.
Benefit-Cost Ratios for  Other Longitudinal Studies <ul><li>Abecedarian Educational Child Care  </li></ul><ul><ul><li>$4 t...
Short-Run Benefits <ul><li>Allow parents to enter workforce </li></ul><ul><li>Reduce absenteeism and turnover </li></ul><u...
Lessons Learned from Research  <ul><li>Invest in quality </li></ul><ul><li>Involve parents </li></ul><ul><li>Start early <...
Moving Forward <ul><li>Prenatal/early infant home visits for at-risk mothers  </li></ul><ul><ul><li>Nurses for Newborns (S...
 
Business Leadership in  Early Childhood Development <ul><li>Partnership for America’s Economic Success & Committee for Eco...
<ul><li>“ Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Recen...
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The Economic Case for Investments in Young Children

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"The Economic Case for Investments in Young Children"

Rob Grunewald's presentation to the Speak Out for Kids Luncheon in St. Louis, MO on October 29, 2009.

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The Economic Case for Investments in Young Children

  1. 1. The Economic Case for Investments in Young Children Rob Grunewald Federal Reserve Bank of Minneapolis
  2. 2. Educational Characteristics of the Labor Force Millions of Workers Age 25 and Over Source: Ellwood (2001)
  3. 3. Four Numbers to Remember <ul><li>700 per second </li></ul><ul><li>18 months </li></ul><ul><li>2:1 ratio </li></ul><ul><li>3:1 odds </li></ul>
  4. 4. Human Brain at Birth 6 Years Old 14 Years Old
  5. 5. Human Brain Development Synapse Formation Dependent on Early Experiences FIRST YEAR -8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Birth (Months) (Years) Sensory Pathways (Vision, Hearing) Language Higher Cognitive Function Source: C. Nelson (2000)
  6. 6. Barriers to Social Mobility Emerge at a Very Young Age 16 mos. 24 mos. 36 mos. Cumulative Vocabulary (Words) College Educated Parents Welfare Parents Child’s Age (Months) 200 600 1200 Source: Hart & Risley (1995)
  7. 7. Risk Factors for Adult Substance Abuse are Embedded in Adverse Childhood Experiences 0 2 4 6 8 10 12 14 16 0 1 2 3 4 Self-Report: Alcoholism Self-Report: Illicit Drugs Source: Dube et al, 2002 Source: Dube et al, 2005 % % ACEs 0 5 10 15 20 25 30 35 40 0 1 2 3 4 5+
  8. 8. Risk Factors for Adult Depression are Embedded in Adverse Childhood Experiences Odds Ratio ACEs Source: Chapman et al, 2004 0 1 2 3 4 5+ 1 2 4 3 5
  9. 9. Risk Factors for Adult Heart Disease are Embedded in Adverse Childhood Experiences ACEs Source: Dong et al, 2004 Odds Ratio 0 1 2 3 4 5,6 7,8 0.5 1 1.5 2 2.5 3 3.5
  10. 10. High/Scope Study of Perry Preschool <ul><li>In early 1960s, 123 children from low-income families in Ypsilanti, Mich. </li></ul><ul><li>Children randomly selected to attend Perry or control group. </li></ul><ul><li>High-quality program with well trained teachers, daily classroom sessions and weekly home visits. </li></ul><ul><li>Tracked participants and control group through age 40. </li></ul>
  11. 11. Perry: Educational Effects Source: High/Scope Educational Research Foundation
  12. 12. Perry: Economic Effects at Age 40 Source: High/Scope Educational Research Foundation
  13. 13. Perry: Arrested 5 or More Times Before Age 40 Source: High/Scope Educational Research Foundation
  14. 14. Perry: Average Number of Months Served in Prison by Age 40 Source: High/Scope Educational Research Foundation
  15. 15. Perry Preschool Costs and Benefits Over 62 Years Source: High/Scope Educational Research Foundation
  16. 16. Perry Preschool — Estimated Return on Investment <ul><li>Benefit-Cost Ratio = $16 to $1 </li></ul><ul><li>Annual Rate of Return = 18% </li></ul><ul><li>Public Rate of Return = 16% </li></ul>
  17. 17. Abecedarian, Educational Child Care <ul><li>Full-day, year-round program near Chapel Hill, N.C. Children from low-income families were randomly selected to attend Abecedarian or control group. </li></ul><ul><li>   </li></ul>
  18. 18. Abecedarian: Educational and Health Effects Source: Carolina Abecedarian Study
  19. 19. Chicago Child-Parent Centers <ul><li>Half-day, large-scale program in Chicago public schools. Comparison group was a sample of eligible nonparticipants. </li></ul><ul><li>   </li></ul>
  20. 20. Chicago Child-Parent Centers Source: Arthur Reynolds, et al.
  21. 21. Elmira Prenatal/Early Infancy Project Higher-Risk Families <ul><li>Home visiting program by registered nurses for at-risk mothers, prenatal through first two years of child’s life. Randomly selected participants were compared with a control group. </li></ul><ul><li>   </li></ul>
  22. 22. Elmira Prenatal/Early Infancy Project High-Risk Families Source: David Olds, et al.
  23. 23. Benefit-Cost Ratios for Other Longitudinal Studies <ul><li>Abecedarian Educational Child Care </li></ul><ul><ul><li>$4 to $1 </li></ul></ul><ul><li>Chicago-Child Parent </li></ul><ul><ul><li>$7 to $1 </li></ul></ul><ul><li>Elmira Prenatal/Early Infancy Project </li></ul><ul><ul><li>$5 to $1 </li></ul></ul>
  24. 24. Short-Run Benefits <ul><li>Allow parents to enter workforce </li></ul><ul><li>Reduce absenteeism and turnover </li></ul><ul><li>Attract businesses </li></ul>
  25. 25. Lessons Learned from Research <ul><li>Invest in quality </li></ul><ul><li>Involve parents </li></ul><ul><li>Start early </li></ul><ul><li>Reach at-risk population </li></ul><ul><li>Teach cognitive and noncognitive skills </li></ul><ul><li>Bring to scale </li></ul>
  26. 26. Moving Forward <ul><li>Prenatal/early infant home visits for at-risk mothers </li></ul><ul><ul><li>Nurses for Newborns (St. Louis) </li></ul></ul><ul><li>Access to health care </li></ul><ul><ul><li>Proposals for Medicaid Outreach </li></ul></ul><ul><li>Parent education </li></ul><ul><ul><li>Parents as Teachers (St. Louis) </li></ul></ul><ul><li>Quality child care </li></ul><ul><ul><li>Quality Rating System </li></ul></ul><ul><li>Access to preschool </li></ul><ul><ul><li>CMC’s work to ease child care subsidy “cliff-effect” </li></ul></ul>
  27. 28. Business Leadership in Early Childhood Development <ul><li>Partnership for America’s Economic Success & Committee for Economic Development </li></ul><ul><li>Success By 6 – United Way </li></ul><ul><li>PNC Financial Services, Gates Foundation </li></ul><ul><li>Minnesota Early Learning Foundation </li></ul>
  28. 29. <ul><li>“ Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Recent research – some sponsored by the Federal Reserve Bank of Minneapolis in collaboration with the University of Minnesota – has documented the high returns that early childhood programs can pay in terms of subsequent educational attainment and in lower rates of social problems, such as teenage pregnancy and welfare dependency.” </li></ul><ul><li>Remarks by Federal Reserve Board Chairman Ben S. Bernanke </li></ul><ul><li>Before the Greater Omaha Chamber of Commerce, </li></ul><ul><li>February 6, 2007 </li></ul>
  29. 30. minneapolisfed.org

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