The economics of childhood: a Nobel Laureate makes the case for early public investment

The economic returns on early investments are high, Professor James Heckman, Nobel Laureate economist from the University of Chicago, told a group of Missouri business leaders at a high level summit in St. Louis last week.

But it’s not just cognitive abilities we should be focusing on, he said. While intelligence is an important determinant of socioeconomic success, it’s social-emotional “soft skills” like perseverance, attention, motivation and self confidence that really move children toward life success.

From Prof. James Heckman's presentation 11/16/09 to MO Business Leaders Summit

Sure, remedial programs for teens and young adults can be effective, but they’re much more costly in producing the same results (e.g., skill development). He laid out a strong case for public support for early intervention…specifically, early childhood interventions for disadvantaged children.

What constitutes ‘disadvantaged’? According to Heckman, it’s the quality of parenting. John Medina, who spoke to an audience of 1,300 at the Parents as Teachers conference the week before, agrees. “Stressed brains don’t learn the same way as non-stressed brains,” he says. Children who grow up in households under constant stress—whether from bickering parents, economic constraints, alcoholism/drug addiction—do not learn as well as others.

Organizations like Parents as Teachers that provide home visits can affect the lives of parents, creating permanent change in the home environment. And that’s a powerful return an anyone’s investment.


3 thoughts on “The economics of childhood: a Nobel Laureate makes the case for early public investment

  1. Graham

    I think that the key here is that the quality of parenting is the primary factor in ‘advantage’ and ‘disadvantaged.’

    The reason that Parents as Teachers is so effective – and so necessary – is that it isn’t just dealing with disadvantaged kids. It is addressing the primary issue of advantage and disadvantage in a way universal pre-k never can or will.

    Incidentally, there are 2 other Nobel Prize winners who should influence parenting advocates.

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