Human Capital and Early Childhood Development
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Human Capital and Early Childhood Development Address to CEET 11 th Annual National Conference Prof. Peter Dawkins Secretary, Department of Education and Early Childhood Development. Overview. The place of early childhood in the National (Human Capital) Reform Agenda The evidence base

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Human Capital and Early Childhood DevelopmentAddress to CEET 11th Annual National Conference Prof. Peter DawkinsSecretary, Department of Education and Early Childhood Development


  • The place of early childhood in the National (Human Capital) Reform Agenda

  • The evidence base

    • The intellectual coalition of interest on the early childhood

    • Economists and the economics of early childhood

  • The Department of Education and Early Childhood Development

The place of early childhood in the National (Human Capital) Reform Agenda

National Reform Agenda – Early Childhood, Education and Training


Healthier, better skilled and more motivated workforce


Work Incentives

Early Childhood, Education & Training

Adult Skills

Early Childhood

Base Literacy & Numeracy Skills

Youth Transition Pathways

Educational attainment is key to improved workforce participation

Participation and educational attainment

Preschool participants

No preschool

Minimum expected level

Data from the UK Effective Preschool, Primary and Secondary Education 3-14 Project, July 2007

Quality and educational attainment

Months of literacy gain at 8 years old

Quality of Preschool:

Data from the UK Effective Preschool, Primary and Secondary Education 3-14 Project, July 2007

Early childhood development: NRA approach

Victoria’s plan under the NRA

  • Three groups of actions, 53 in all

  • 20 existing Victorian commitments($136m over four years, funded in budget)

  • 24 recommended directions for Victoria’s ‘next steps’ (estimated at $150m over four years)

    • Major reforms eg higher kindergarten hours

    • Need engagement and support of Commonwealth

  • Call for 9 specific Commonwealth actions ($100m)

    • Particularly extension of Child Care Benefit

Key features

A series of actions to develop an integrated, high-quality and accessible early childhood service system that includes:

  • A more professional early childhood education and care workforce

  • Stronger universal learning services for three and four-year-olds and the eventual integration of child care and kindergarten

  • Better targeting of resources and services to disadvantaged children and their families

Recognising families and services


The Evidence Base

What the evidence says

The evidence tells us that development varies for different groups, with socio-economic status an important factor

Children in the lowest socio-economic groups have lower developmental scores in the AEDI

Source: AEDI Communities Data 2004-2005

The intellectual coalition of interest

  • Early childhood research informed by

  • Neurosciences (and imaging)

  • Longitudinal studies

  • Education effectiveness and quality

  • Economic evaluation

  • The brain’s development is changed and shaped by experiences:

  • This is audible in language skills

  • In extreme cases of abuse and neglect, visible in the brain

Key capacities develop in early childhood

The brain’s development is changed and shaped by experiences

What economists are saying about investing in early years…

“Why should society invest in disadvantaged young children? The traditional argument for doing so is made on the grounds of fairness and social justice. It is an argument founded on equity considerations.

There is another argument that can be made. It is based on economic efficiency. It is more powerful than the equity argument, in part because the gains from such investment can be quantified and they are large”.

Nobel Laureate, James J Heckman, “Investing in Disadvantaged Young Children is an Economically Efficient Policy”, Presentation to the Committee for Economic Development, New York, January 10, 2006

Spending on Health, Education, Income Support, Social Services and Crime

Return on Investment ( after Heckman et al)









The investment question

Brain Malleability

Heckman argues…

  • The economic returns to early interventions are high

  • The returns to later interventions are lower

  • The reason is the technology of skill formation

  • Skill begets skill and early skill makes later skill acquisition easier

  • Remedial programs for adolescents and young adults cost more to produce the same level of adult skill

  • Children from advantaged environments by and large receive substantial early investment.

  • Most public policy discussion focuses on cognitive ability (especially IQ). Socio-emotional skills are also important.

What the empirical evidence says..

  • Janet Currie and Duncan Thomas investigate the effect of US Head Start Program using a national sample of children. Comparisons are drawn between siblings to control for selection

  • For white children Head Start is associated with large and significant gains in test scores and a significantly reduced probability of repeating a grade.

  • For African-American children there are also large gains in test scores but the gains are quickly lost. There is no effect on grade repetition for African Americans.

  • All children who attend Head Start gain greater access to preventative health

Janet Currie and Duncan Thomas

“Does Head Start Make a Difference?”

The American Economic Review,

Vol 85, No. 3 (June 1995)

Economic returns on early childhood programs for disadvantaged children

  • American evaluation of 19 effective early childhood intervention programs (including Head Start)

  • Effective programs generate a return to society:

    • from $1.80 to $17.07 for each dollar (US$) spent on the program

    • academic achievement, behaviour, educational progression and attainment, delinquency and crime, and labour market success

Source:Karoly, L, Kilburn, M, and Cannon, J, 2005, Early Childhood Interventions: Proven Results, Future Promise, RAND Corporation

Early childhood focus reflects evidence on

  • Long-term effects of early health, development problems

    • Low birth weight associated with a range of poor outcomes in adulthood

    • Multiple risk factors compound effect

  • Impacts of quality learning opportunities

    • Particularly for disadvantaged groups

  • Effectiveness of early interventions

  • Cost-benefit analysis

The Department of Education and Early Childhood Development

Establishment of DEECD signals new commitment to building human capital in Victoria:

“Linking early childhood services and school education recognises that children’s development is a continuous process from birth to adulthood, and government services must reflect this to provide each child with the best opportunity.”

The Honourable John Brumby

Premier of Victoria

2 August 2007

Department for Education and Early Childhood Development

Maxine Morand

Minister for Children and Early Childhood Development

The creation of DEECD provides opportunities to improve outcomes for children and families

  • A single point of focus for human capital development from 0 to 24

    • Greater ability to track progress and development of individuals and intervene and support where needed

    • Greater efficiency in services and resource allocation for children and families

  • Integrated and seamless service delivery for families

    • Improved coordination and transition between stages of development

    • Place based approaches

Delivering through DEECD

Human Capital Reform Agenda: From Birth to Adulthood

Middle Years


8 – 16yrs

Early Childhood Development


Youth Transitions

16 –24 years

Universal system of support combined with a targeted approach in areas of high need

Challenges and opportunities

  • Putting learning at the centre

  • Schools, kindergarten, child care

  • Seamless system, support for transitions

  • Local government the major partner

  • Mix of providers

  • Health responsibilities

  • Focusing on disadvantage, vulnerable families

  • Community expectations

Questions and discussion

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