Thursday night, in a speech to the annual conference of the American Economic Association in Philadelphia, Jim Heckman mentioned, in an aside, that an early childhood education initiative may show up in this year’s State of the Union address.
Heckman won a Nobel Prize in 2000. I followed up with his office and was cautioned that the aside was a conjecture, and not to treat Heckman as an administration source. But the idea of real money for pre-kindergarten does fit with what the president’s been saying. And it fits with what the profession of economics knows about how to spend the least money for the most return on economic development.
In December, President Obama gave a speech on economic mobility, pointing out that Americans are more willing to accept economic inequality because they believe in the American Dream. An economist would describe that dream as having “low intergenerational income elasticity,” a low likelihood that what your parents earn will determine what you earn. Problem is, the U.S. has a relatively high elasticity. We are more likely than citizens in most other developed countries to earn exactly what our parents do.
In the speech, he advocated for stronger unions and collective bargaining, for better access to money for college and for apprenticeships and trade training. He devoted a whole paragraph to early childhood education.
“And I’ve also embraced an idea that I know all of you at the Center for American Progress have championed—and, by the way, Republican governors in a couple of states have championed—and that’s making high-quality preschool available to every child in America. We know that kids in these programs grow up likelier to get more education, earn higher wages, form more stable families of their own. It starts a virtuous cycle, not a vicious one. And we should invest in that. We should give all of our children that chance.”
Every politician wants to help the kids. What James Heckman offers is a way to take that word, “investment,” seriously. Think of the federal government as a venture capital fund. Last Thursday, Heckman gave the elevator pitch. If there’s any money to spend, here’s where and how it will do the most good.
In his speech, Heckman pulled together all of what we know about economic development, education, and success later in life to come up with a grand unifying theory, though he didn’t call it that. The problem of looking at each potential policy in isolation, he explained—pre-K education, improvements to secondary schools, college loan subsidies—is that we ignore how each policy affects the one that follows it.
A child’s life is not predetermined at age 3, or 5, or even 18, he said. But each age provides an opportunity to give a child skills that will make the next stage more productive. The earlier a kid gets help, the higher the “multiplier” later on in life—a kid in a good elementary school is better set up to do well in high school, which will in turn make a Pell Grant for a college education even more effective at raising his income as an adult. Invest in a kid before kindergarten, and you increase the returns on every potential investment that follows it.
The earlier life stages, said Heckman, are important for improving cognitive skills—basic processing power, things we measure with IQ tests. Later in childhood is when it becomes important to develop non-cognitive skills, such as self-discipline. And early childhood is when a child’s parents are most constrained, financially. Parents with young children aren’t yet at their peak earning potential, and they’re burdened with child-care costs. (And they are tired, I tell you. They are very, very tired.) Put these two observations together, said Heckman, and you get “a potentially serious market imperfection.” Parents are least able to spend on education to improve cognitive skills when their children most need it.
He also pointed to the Perry preschool program as something the Obama administration has used as an example. Between 1962 and 1967, the Perry program offered preschool to a group of three- and four-year-olds born in poverty. Interviewed at age 40 in the mid-2000s, that group is now significantly more likely to have graduated from high school and to earn more than $20,000 a year.
So get ready to read up on the Perry program after this month’s State of the Union address. And get ready to start fighting over where to find the money to expand it to the whole country.