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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).

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the economic case for investments in young children
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
Educational Characteristics of the Labor ForceMillions of Workers Age 25 and Over

Source: Ellwood (2001)

slide3
Human Brain DevelopmentSynapse Formation Dependent on Early Experiences

Language

Higher Cognitive Function

Sensory Pathways

(Vision, Hearing)

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)

Source: C. Nelson (2000)

slide4
Barriers to Social Mobility Emerge at a Very Young Age

1200

College Educated Parents

600

Cumulative Vocabulary (Words)

Welfare Parents

200

16 mos.

24 mos.

36 mos.

Child’s Age (Months)

Source: Hart & Risley (1995)

slide5
Risk Factors for Adult Substance Abuse are Embedded in Adverse Childhood Experiences

Self-Report: Alcoholism Self-Report: Illicit Drugs

40

16

35

14

%

%

30

12

25

10

20

8

15

6

10

4

5

2

0

0

ACEs

0

1

2

3

4

5+

0

1

2

3

4

Source: Dube et al, 2002 Source: Dube et al, 2005

risk factors for adult depression are embedded in adverse childhood experiences
Risk Factors for Adult Depression are Embedded in Adverse Childhood Experiences

5

4

3

Odds Ratio

2

1

0

1

2

3

4

5+

ACEs

Source: Chapman et al, 2004

slide7
Risk Factors for Adult Heart Disease are Embedded in Adverse Childhood Experiences

3.5

3

2.5

Odds Ratio

2

1.5

1

0.5

0

1

2

3

4

5,6

7,8

ACEs

Source: Dong et al, 2004

high scope study of perry preschool
High/Scope Study of Perry Preschool
  • In early 1960s, 123 children from low-income families in Ypsilanti, Mich.
  • Children randomly selected to attend Perry or control group.
  • High-quality program with well trained teachers, daily classroom sessions and weekly home visits.
  • Tracked participants and control group through age 40.
perry educational effects
Perry: Educational Effects

Source: High/Scope Educational Research Foundation

perry economic effects at age 40
Perry: Economic Effects at Age 40

Source: High/Scope Educational Research Foundation

perry arrested 5 or more times before age 40
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
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
Perry PreschoolCosts and Benefits Over 62 Years

Source: High/Scope Educational Research Foundation

perry preschool estimated return on investment
Perry Preschool — Estimated Return on Investment
  • Benefit-Cost Ratio = $16 to $1
  • Annual Rate of Return = 18%
  • Public Rate of Return = 16%
benefit cost ratios for other longitudinal studies
Benefit-Cost Ratios for Other Longitudinal Studies
  • Abecedarian Educational Child Care
    • $4 to $1
  • Chicago-Child Parent
    • $7 to $1
  • Elmira Prenatal/Early Infancy Project
    • $5 to $1
short run benefits
Short-Run Benefits
  • Allow parents to enter workforce
  • Reduce absenteeism and turnover
  • Attract businesses
lessons learned from research
Lessons Learned from Research
  • Invest in quality
  • Involve parents
  • Start early
  • Reach at-risk population
  • Teach cognitive and noncognitive skills
  • Bring to scale
moving forward
Moving Forward
  • Prenatal/early infant home visits for at-risk mothers
  • Access to health care
  • Parent education
  • Quality child care
  • Access to preschool
role of business leaders in early childhood development
Role of Business Leaders in Early Childhood Development
  • Serve as key advocate
  • Promote best practices for parent employees
  • Join the public policy discussion
business leadership in early childhood development
Business Leadership in Early Childhood Development
  • Partnership for America’s Economic Success & Committee for Economic Development
  • Success By 6 – United Way
  • PNC Financial Services, Gates Foundation
  • Minnesota Early Learning Foundation
slide22
“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.”

Remarks by Federal Reserve Board Chairman Ben S. Bernanke

Before the Greater Omaha Chamber of Commerce,

February 6, 2007

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