The Ultimate Growth Industry (Nancy Folbre)
UMass-Amherst econ prof Nancy Folbre was a guest economist on the New York Times‘s Economix blog yesterday. Here is her post.
Willing to invest for the long term? Looking for a socially responsible growth industry offering consistently high returns? Want to “buy American” and create domestic jobs without discouraging international trade? Consider the benefits of public investments in early childhood education.
Critics of proposed increases to Head Start in the House stimulus bill labeled them porky pet projects. But many economists argue that those forms of spending represent a very big collective piggy bank. Spending on programs specifically designed to provide high-quality early education—especially for children in low-income families—yields significant and measurable economic benefits.
W. Steven Barnett, the director of the National Institute for Early Education Research, and other education experts have been making this argument for years. The University of Chicago economist and Nobel Prize winner James Heckman puts his reputation on the line for it, mobilizing a tremendous amount of evidence on the impact of model programs on children’s cognitive skills and personality traits like conscientiousness. As he puts it, “learning begets learning.”
Reading though his dense, 100-plus-page PowerPoint presentations will make you wish you had attended a better pre-school. His estimate of the average rate of return—explained below—recalls a number that stockbrokers once promised us we could get in our private retirement accounts: 12 percent per annum.
Read the rest of the post.