Investing in Early Childhood

As Nobel Prize-winning economist James Heckman has noted, there is a growing developmental gap between economically disadvantaged kids and children from more affluent backgrounds. Lower socioeconomic status is one of the most reliable predictors of poor self-regulation in young children, and poor self-regulation makes it harder to focus and get along with others at school. When kids begin schooling with these disadvantages, they are more likely encounter stumbling blocks, and veer off the path that leads to long-term success.

By contrast, the path is smoother for kids who start school with higher levels of self-regulation and social competence. Children growing up in stressful, lower income environments are less likely achieve this developmental head start, but when they do, their early abilities predict a brighter economic future.

A recent study is case in point. Back in 1991, researchers asked teachers to evaluate the social skills of more than 600 low-income kindergarteners. From these teacher ratings, each child was given a summary score, ranging from 1 to 5, with higher numbers indicating that a child showed more friendliness, cooperation, and helpfulness in the classroom. Nineteen years later, these same kids -- now adults in their mid-twenties -- were tracked down and interviewed. How had they turned out?

The answer was predicted by those early teacher ratings. For every 1-point increase on the 5-point scale of kindergarten social  competence, kids had better odds of success. They were more likely to have graduated from high school on time, and more likely to have secured full time jobs. For each 1-point increase, a child had twice the odds of earning a college degree by the age of 25.

Conversely, each 1-point decrease on the 5-point scale was linked with worse adult outcomes -- like higher odds of getting arrested, ending up in public housing, or being on a waiting list for public housing.

So early childhood social competence bodes well for an individual's future, and predicts outcomes that benefit society as a whole. Can we create more of these low income success stories? The evidence in favor is compelling.

Experimental research suggests that carefully-designed social activities can help close the developmental gap for disadvantaged kids. In one study, a 12-week "Kindness Curriculum" improved the social competence of preschoolers who previously had been  struggling. Other programs have reported similar gains for self-regulation and staying on task.

Then there is the long-term research, studies tracking the adult outcomes of children enrolled in preschool intervention programs like the Carolina Abecedarian project. Not only did these kids go on to earn higher incomes as adults, they are physically healthier in middle age, showing substantial improvements over their control-group peers. The savings to taxpayers -- in government services and reduced health costs -- means the program has more than paid for itself. Researchers estimate that the project has returned $2.50 for every dollar invested.

How do we bring these benefits to Memphis? Business leaders and policymakers need to get involved in the conversation, and explore new approaches to investing in early childhood. One promising new model for financing is the Social Impact Bond, also known as "Pay for Success." Programs get started with private capital, but sponsors are reimbursed by the government if target outcomes are reached. For more information on possible solutions, and the community impact of early socio-emotional development, please visit the Urban Child Institute website at www.tuci.org.