The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity
-
0:11 - 0:14In this talk today,
I want to present a different idea -
0:16 - 0:19for why investing
in early childhood education -
0:19 - 0:22makes sense as a public investment.
-
0:22 - 0:24It's a different idea, because usually,
-
0:24 - 0:26when people talk about
early childhood programs, -
0:26 - 0:29they talk about all the wonderful
benefits for participants -
0:29 - 0:32in terms of former participants,
in preschool, -
0:32 - 0:35they have better K-12 test scores,
-
0:35 - 0:36better adult earnings.
-
0:36 - 0:38Now that's all very important,
-
0:38 - 0:42but what I want to talk about
is what preschool does -
0:43 - 0:44for state economies
-
0:44 - 0:47and for promoting
state economic development. -
0:48 - 0:51And that's actually crucial
-
0:51 - 0:55because if we're going
to get increased investment -
0:55 - 0:57in early childhood programs,
-
0:57 - 1:00we need to interest
state governments in this. -
1:00 - 1:03The federal government
has a lot on its plate, -
1:03 - 1:05and state governments
are going to have to step up. -
1:05 - 1:07So we have to appeal to them,
-
1:07 - 1:10the legislators in the state government,
-
1:10 - 1:12and turn to something they understand,
-
1:12 - 1:14that they have to promote
the economic development -
1:14 - 1:16of their state economy.
-
1:16 - 1:18Now, by promoting economic development,
-
1:18 - 1:19I don't mean anything magical.
-
1:19 - 1:23All I mean is, is that
early childhood education -
1:23 - 1:26can bring more and better jobs to a state
-
1:26 - 1:29and can thereby promote
higher per capita earnings -
1:30 - 1:31for the state's residents.
-
1:32 - 1:36Now, I think it's fair to say
that when people think about -
1:36 - 1:38state and local economic development,
-
1:38 - 1:42they don't generally think
first about what they're doing -
1:42 - 1:44about childcare
and early childhood programs. -
1:45 - 1:48I know this. I've spent most of my career
researching these programs. -
1:48 - 1:50I've talked to a lot of directors
-
1:50 - 1:52of state economic development agencies
about these issues, -
1:52 - 1:54a lot of legislators about these issues.
-
1:54 - 1:57When legislators and others think
about economic development, -
1:57 - 2:00what they first of all think
about are business tax incentives, -
2:01 - 2:04property tax abatements,
job creation tax credits, -
2:04 - 2:07you know, there are a million
of these programs all over the place. -
2:07 - 2:09So for example,
states compete very vigorously -
2:09 - 2:13to attract new auto plants
or expanded auto plants. -
2:13 - 2:15They hand out all kinds
of business tax breaks. -
2:15 - 2:17Now, those programs can make sense
-
2:17 - 2:20if they in fact induce
new location decisions, -
2:20 - 2:22and the way they can make sense is,
-
2:22 - 2:24by creating more and better jobs,
-
2:24 - 2:27they raise employment rates, raise
per capita earnings of state residents. -
2:27 - 2:29So there is a benefit to state residents
-
2:29 - 2:32that corresponds to the costs
that they're paying -
2:32 - 2:34by paying for these business tax breaks.
-
2:34 - 2:37My argument is essentially
that early childhood programs -
2:37 - 2:40can do exactly the same thing,
-
2:41 - 2:44create more and better jobs,
but in a different way. -
2:45 - 2:48It's a somewhat more indirect way.
-
2:48 - 2:51These programs can promote
more and better jobs by, -
2:51 - 2:54you build it, you invest
in high-quality preschool, -
2:55 - 2:58it develops the skills
of your local workforce -
2:58 - 3:01if enough of them stick
around, and, in turn, -
3:01 - 3:04that higher-quality local workforce
-
3:04 - 3:08will be a key driver of creating jobs
-
3:08 - 3:11and creating higher earnings per capita
in the local community. -
3:11 - 3:14Now, let me turn to some numbers on this.
-
3:14 - 3:18Okay. If you look
at the research evidence - -
3:19 - 3:23that's extensive - on how much
early childhood programs -
3:23 - 3:27affect the educational attainment,
wages and skills -
3:28 - 3:31of former participants
in preschool as adults, -
3:32 - 3:34you take those known effects,
-
3:34 - 3:37you take how many of those folks
will be expected -
3:37 - 3:40to stick around the state or local economy
and not move out, -
3:41 - 3:45and you take research on how much
skills drive job creation, -
3:46 - 3:47you will conclude,
-
3:47 - 3:50from these three separate
lines of research, -
3:50 - 3:53that for every dollar invested
in early childhood programs, -
3:54 - 3:57the per capita earnings of state residents
-
3:57 - 4:00go up by two dollars and 78 cents,
-
4:00 - 4:02so that's a three-to-one return.
-
4:02 - 4:05Now you can get much higher returns,
-
4:05 - 4:09of up to 16-to-one,
if you include anti-crime benefits, -
4:09 - 4:13if you include benefits
to former preschool participants -
4:13 - 4:15who move to some other state,
-
4:15 - 4:19but there's a good reason
for focusing on these three dollars -
4:19 - 4:21because this is salient and important
-
4:21 - 4:23to state legislators
and state policy makers, -
4:23 - 4:25and it's the states
that are going to have to act. -
4:25 - 4:28So there is this key benefit
that is relevant -
4:28 - 4:31to state policy makers in terms
of economic development. -
4:32 - 4:35Now, one objection you often hear,
-
4:35 - 4:40or maybe you don't hear it because
people are too polite to say it, is, -
4:41 - 4:44why should I pay more taxes
-
4:45 - 4:48to invest in other people's children?
-
4:49 - 4:51What's in it for me?
-
4:51 - 4:54And the trouble with that objection,
-
4:54 - 4:57it reflects a total misunderstanding
-
4:57 - 5:00of how much local economies
-
5:01 - 5:03involve everyone being interdependent.
-
5:04 - 5:07Specifically, the interdependency here is,
-
5:08 - 5:11is that there are huge spillovers
of skills - -
5:12 - 5:15that when other people's children
get more skills, -
5:17 - 5:20that actually increases
the prosperity of everyone, -
5:21 - 5:24including people
whose skills don't change. -
5:24 - 5:27So for example, numerous
research studies have shown -
5:27 - 5:29if you look at what really drives
-
5:29 - 5:31the growth rate of metropolitan areas,
-
5:31 - 5:35it's not so much low taxes,
low cost, low wages; -
5:37 - 5:39it's the skills of the area.
-
5:39 - 5:41Particularly, the proxy for skills
-
5:41 - 5:44that people use is percentage
of college graduates in the area. -
5:44 - 5:47So when you look, for example,
at metropolitan areas -
5:47 - 5:50such as the Boston area,
Minneapolis-St. Paul, -
5:51 - 5:55Silicon Valley, these areas
are not doing well economically -
5:56 - 5:58because they're low-cost.
-
5:58 - 6:01I don't know if you ever tried
to buy a house in Silicon Valley. -
6:01 - 6:03It's not exactly a low-cost proposition.
-
6:03 - 6:08They are growing because they have
high levels of skills. -
6:09 - 6:12So when we invest
in other people's children, -
6:12 - 6:16and build up those skills,
we increase the overall job growth -
6:16 - 6:18of a metro area.
-
6:18 - 6:21As another example, if we look
-
6:22 - 6:25at what determines an individual's wages,
-
6:25 - 6:29and we do statistical exploration of that,
what determines wages, -
6:29 - 6:33we know that the individual's wages
will depend, in part, -
6:34 - 6:36on that individual's education,
-
6:36 - 6:39for example whether or not
they have a college degree. -
6:39 - 6:43One of the very interesting facts
is that, in addition, -
6:43 - 6:47we find that even once
we hold constant, statistically, -
6:47 - 6:50the effect of your own education,
-
6:50 - 6:53the education of everyone else
in your metropolitan area -
6:53 - 6:55also affects your wages.
-
6:55 - 6:59So specifically, if you hold constant
your education, -
6:59 - 7:03you stick in percentage of college
graduates in your metro area, -
7:03 - 7:07you will find that has a significant
positive effect on your wages -
7:08 - 7:10without changing your education at all.
-
7:10 - 7:13In fact, this effect is so strong
-
7:14 - 7:17that when someone gets a college degree,
-
7:17 - 7:20the spillover effects of this on the wages
-
7:20 - 7:22of others in the metropolitan area
-
7:22 - 7:25are actually greater
than the direct effects. -
7:25 - 7:28So if someone gets a college degree,
their lifetime earnings -
7:28 - 7:31go up by a huge amount,
over 700,000 dollars. -
7:31 - 7:34There's an effect on everyone else
in the metro area -
7:34 - 7:38of driving up the percentage of college
graduates in the metro area, -
7:38 - 7:41and if you add that up -
it's a small effect for each person, -
7:41 - 7:45but if you add that up across
all the people in the metro area, -
7:45 - 7:48you actually get that the increase
in wages for everyone else -
7:48 - 7:51in the metropolitan area
adds up to almost a million dollars. -
7:51 - 7:54That's actually greater
than the direct benefits -
7:54 - 7:57of the person choosing to get education.
-
7:57 - 7:58Now, what's going on here?
-
7:58 - 8:01What can explain these huge
spillover effects of education? -
8:02 - 8:04Well, let's think about it this way.
-
8:04 - 8:07I can be the most skilled person
in the world, -
8:07 - 8:10but if everyone else
at my firm lacks skills, -
8:11 - 8:13my employer is going
to find it more difficult -
8:14 - 8:17to introduce new technology,
new production techniques. -
8:18 - 8:21So as a result, my employer
is going to be less productive. -
8:21 - 8:24They will not be able to afford
to pay me as good wages. -
8:25 - 8:28Even if everyone at my firm
has good skills, -
8:29 - 8:32if the workers at the suppliers to my firm
-
8:32 - 8:34do not have good skills,
-
8:34 - 8:36my firm is going to be less competitive
-
8:36 - 8:38competing in national
and international markets. -
8:39 - 8:42And again, the firm
that's less competitive -
8:42 - 8:44will not be able to pay as good wages,
-
8:44 - 8:47and then, particularly
in high-tech businesses, -
8:49 - 8:52they're constantly stealing ideas
and workers from other businesses. -
8:52 - 8:55So clearly the productivity
of firms in Silicon Valley -
8:55 - 8:58has a lot to do with the skills
not only of the workers at their firm, -
8:59 - 9:03but the workers at all the other
firms in the metro area. -
9:03 - 9:07So as a result, if we can invest
in other people's children -
9:07 - 9:09through preschool and other
early childhood programs -
9:09 - 9:13that are high-quality,
we not only help those children, -
9:13 - 9:16we help everyone in the metropolitan area
-
9:17 - 9:20gain in wages and we'll have
the metropolitan area -
9:20 - 9:22gain in job growth.
-
9:22 - 9:25Another objection you sometimes hear
-
9:25 - 9:27to invest in early childhood programs
-
9:27 - 9:30is concern about people moving out.
-
9:31 - 9:34So, you know, maybe
Ohio's thinking about investing -
9:34 - 9:37in more preschool education
-
9:37 - 9:40for children in Columbus, Ohio,
-
9:41 - 9:43but they're worried that these
little Buckeyes will, -
9:43 - 9:46for some strange reason,
decide to move to Ann Arbor, Michigan, -
9:46 - 9:48and become Wolverines.
-
9:48 - 9:51And maybe Michigan
will be thinking about investing -
9:51 - 9:53in preschool in Ann Arbor, Michigan,
and be worried -
9:53 - 9:57these little Wolverines will end up
moving to Ohio and becoming Buckeyes. -
9:57 - 10:00And so they'll both under invest
because everyone's going to move out. -
10:00 - 10:03Well, the reality is,
if you look at the data, -
10:04 - 10:07Americans aren't as hyper-mobile
as people sometimes assume. -
10:08 - 10:12The data is that over 60 percent
of Americans -
10:13 - 10:15spend most of their working careers
-
10:15 - 10:18in the state they were born in,
over 60 percent. -
10:19 - 10:22That percentage does not vary much
from state to state. -
10:23 - 10:26It doesn't vary much
with the state's economy, -
10:26 - 10:28whether it's depressed or booming,
-
10:28 - 10:30it doesn't vary much over time.
-
10:32 - 10:35So the reality is, if you invest in kids,
-
10:37 - 10:39they will stay.
-
10:39 - 10:42Or at least, enough of them will stay
-
10:42 - 10:45that it will pay off
for your state economy. -
10:45 - 10:49Okay, so to sum up,
there is a lot of research evidence -
10:49 - 10:52that early childhood programs,
if run in a high-quality way, -
10:53 - 10:55pay off in higher adult skills.
-
10:55 - 10:56There's a lot of research evidence
-
10:57 - 11:00that those folks will stick around
the state economy, -
11:00 - 11:04and there's a lot of evidence
that having more workers -
11:04 - 11:06with higher skills in your local economy
-
11:06 - 11:09pays off in higher wages and job growth
for your local economy, -
11:09 - 11:12and if you calculate
the numbers for each dollar, -
11:13 - 11:16we get about three dollars back
-
11:16 - 11:18in benefits for the state economy.
-
11:19 - 11:22So in my opinion,
the research evidence is compelling -
11:22 - 11:24and the logic of this is compelling.
-
11:24 - 11:27So what are the barriers
to getting it done? -
11:28 - 11:30Well, one obvious barrier is cost.
-
11:31 - 11:34So if you look at what it would cost
-
11:35 - 11:38if every state government invested
-
11:38 - 11:42in universal preschool at age four,
full-day preschool at age four, -
11:43 - 11:46the total annual national cost
would be roughly -
11:46 - 11:4730 billion dollars.
-
11:48 - 11:50So, 30 billion dollars is a lot of money.
-
11:51 - 11:53On the other hand, if you reflect on
-
11:55 - 11:58that the U.S.'s population
is over 300 million, -
11:59 - 12:01we're talking about an amount of money
-
12:01 - 12:03that amounts to 100 dollars per capita.
-
12:03 - 12:06Okay? A hundred dollars
per capita, per person, -
12:07 - 12:10is something that any state government
can afford to do. -
12:10 - 12:14It's just a simple matter
of political will to do it. -
12:15 - 12:17And, of course, as I mentioned,
-
12:17 - 12:19this cost has corresponding benefits.
-
12:19 - 12:22I mentioned there's a multiplier
of about three, -
12:22 - 12:232.78, for the state economy,
-
12:24 - 12:27in terms of over 80 billion
in extra earnings. -
12:27 - 12:30And if we want to translate that
from just billions of dollars -
12:30 - 12:32to something that might mean something,
-
12:32 - 12:35what we're talking about is that,
for the average low-income kid, -
12:35 - 12:38that would increase earnings
by about 10 percent -
12:38 - 12:41over their whole career,
just doing the preschool, -
12:41 - 12:44not improving K-12
or anything else after that, -
12:44 - 12:46not doing anything
with college tuition or access, -
12:46 - 12:49just directly improving preschool,
-
12:49 - 12:52and we would get
five percent higher earnings -
12:52 - 12:53for middle-class kids.
-
12:53 - 12:55So this is an investment
-
12:55 - 12:58that pays off in very concrete terms
-
12:58 - 13:02for a broad range of income groups
in the state's population -
13:02 - 13:05and produces large and tangible benefits.
-
13:08 - 13:09Now, that's one barrier.
-
13:09 - 13:12I actually think the more profound barrier
-
13:13 - 13:17is the long-term nature of the benefits
from early childhood programs. -
13:17 - 13:20So the argument I'm making
is, is that we're increasing -
13:20 - 13:22the quality of our local workforce,
-
13:22 - 13:24and thereby increasing
economic development. -
13:24 - 13:27Obviously if we have a preschool
with four-year-olds, -
13:28 - 13:30we're not sending these kids out
at age five -
13:30 - 13:32to work in the sweatshops, right?
-
13:32 - 13:34At least I hope not.
-
13:34 - 13:36So we're talking about an investment
-
13:37 - 13:39that in terms of impacts
on the state economy -
13:39 - 13:43is not going to really pay off
for 15 or 20 years, -
13:43 - 13:46and of course America
is notorious for being -
13:46 - 13:49a short term-oriented society.
-
13:49 - 13:51Now one response you can make to this,
-
13:51 - 13:53and I sometimes have done this in talks,
-
13:53 - 13:56is people can talk about,
there are benefits for these programs -
13:56 - 13:59in reducing special ed
and remedial education costs, -
13:59 - 14:02there are benefits,
parents care about preschool, -
14:02 - 14:04maybe we'll get some migration effects
-
14:04 - 14:06from parents seeking good preschool,
-
14:06 - 14:08and I think those are true,
-
14:08 - 14:10but in some sense
they're missing the point. -
14:10 - 14:12Ultimately, this is something
-
14:12 - 14:15we're investing in now for the future.
-
14:16 - 14:19And so what I want to leave you with
-
14:20 - 14:23is what I think is the ultimate question.
-
14:23 - 14:26I mean, I'm an economist,
but this is ultimately -
14:26 - 14:28not an economic question,
-
14:29 - 14:31it's a moral question:
-
14:31 - 14:34Are we willing, as Americans,
-
14:35 - 14:38are we as a society still capable
-
14:39 - 14:43of making the political
choice to sacrifice now -
14:44 - 14:46by paying more taxes
-
14:46 - 14:50in order to improve the long-term future
-
14:52 - 14:55of not only our kids, but our community?
-
14:55 - 14:58Are we still capable of that as a country?
-
14:59 - 15:02And that's something
that each and every citizen -
15:02 - 15:04and voter needs to ask themselves.
-
15:04 - 15:07Is that something that you
are still invested in, -
15:07 - 15:10that you still believe
in the notion of investment? -
15:10 - 15:12That is the notion of investment.
-
15:12 - 15:14You sacrifice now for a return later.
-
15:14 - 15:17So I think the research evidence
-
15:18 - 15:20on the benefits
of early childhood programs -
15:20 - 15:23for the local economy is extremely strong.
-
15:24 - 15:27However, the moral and political choice
-
15:28 - 15:31is still up to us,
as citizens and as voters. -
15:33 - 15:36Thank you very much.
(Applause)
- Title:
- The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity
- Description:
-
In this well-argued talk, Timothy Bartik makes the macro-economic case for preschool education -- and explains why you should be happy to invest in it, even if you don't have kids that age (or kids at all). The economic benefits of well-educated kids, it turns out, go well beyond the altruistic.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDxTalks
- Duration:
- 15:49
Ivana Korom approved English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
Ivana Korom accepted English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
Ivana Korom edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
Ivana Korom edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
Ivana Korom edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
TED Translators admin edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
TED Translators admin edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity | ||
TED Translators admin edited English subtitles for The economic case for preschool | Timothy Bartik | TEDxMiamiUniversity |