Transcript Social Outcomes of ECEC - Case for public investment? ECEC Meeting 21 June, 2010 Koji Miyamoto, OECD-CERI.

Social Outcomes of ECEC
- Case for public investment?
ECEC Meeting
21 June, 2010
Koji Miyamoto, OECD-CERI
Is there a case for
public investment in ECEC?
1. Externality: ECEC improves individual’s social
outcomes (eg, health and social cohesion) which brings
significant benefits to others.
2. Efficiency of investing early versus later in the lifecycle
(technology of skill formation).
3. Cost-effectiveness: ECEC can be considered to be
among the cost-effective class of interventions tackling
health and crime.
4. Tackling inequality: Early investment in the
disadvantaged groups can be a cost-effective way to
reduce inequalities in social outcomes.
1. Externality
ECEC brings not only economic returns but also wider
benefits such as:
• better health,
• reduced likelihood of individuals engaging in risky behaviours, and
• stronger ‘civic and social engagement’
There are spill-over effects:
• Healthy individuals benefit others (e.g., smoking, drinking, obesity, STD)
• Cohesive individuals benefit others (e.g., volunteering, voting, trust)
• Others benefit from living in a “safe” environment.
2. Efficiency of Investing Early
Skills (cognitive and non-cognitive) are drivers of health,
‘civic and social engagement’ and crime.
Skills can be effectively and efficiently raised through early
investment (technology of skill formation):
• Skills beget skills (Heckman and colleagues)
• Those with higher cognitive ability benefit more from schooling in terms of
health behaviours (Conti, Heckman and Urzua, 2010)
• Skill complementarities (Carneiro, Goodman and Crawford, 2007)
Skills interact
-Smoking at age 16 in the UK
Likelihood of
smoking
Source: Carneiro, Crawford and Goodman (2006)
3. Is ECEC a cost-effective class of
crime/health interventions?
ECEC might make sense even only considering its returns to
health or crime.
• High benefit-cost ratios of early investment in tackling crime (Barnett,
2010; Carneiro and Heckman, 2003).
• Crime Strategy: “educational interventions” versus “law enforcement
interventions” (Lochner and Moretti, 2004)
• Health Strategy: “school-based interventions
versus “health treatment interventions” suggest that ECEC is likely to be
among the cost-effective class of health interventions (OECD, 2010)
Can “ECEC policy” or “education policy” be considered
“health policy” and/or “crime reduction policy” ?
More police officers versus
More high-school graduates? (USA)
Costs of hiring a police officer:
Benefits from reduced crime:
$ 80,000/year
$ 200,000/year
Costs of raising high school graduation:
$ 15,000/year
(which would yield the same benefits of $ 200,000/year)
Levitt (1997) and Lochner and Moretti (2004)
3. Is ECEC a cost-effective class of
crime/health interventions?
ECEC might make sense even only considering its returns to
health or crime.
• High benefit-cost ratios of early investment in tackling crime (Barnett,
2010; Carneiro and Heckman, 2003).
• Crime Strategy: “educational interventions” versus “law enforcement
interventions” (Lochner and Moretti, 2004)
• Health Strategy: “school-based interventions
versus “health treatment interventions” suggest that ECEC is likely to be
among the cost-effective class of health interventions (OECD, 2010)
Can “ECEC policy” or “education policy” be considered
“health policy” and/or “crime reduction policy” ?
4. Tackling inequality
Important source of inequality in health and social cohesion
are skills, and that skills deficits among the disadvantaged
originate early in the lifecycle (Cutler and Lleras-Muney,
2010; Heckman and colleagues).
Disadvantaged parents have limited means to invest in their
children.
Social costs of underinvestment in skills among the
disadvantaged groups is likely to be very high.
CERI’s Work on
Wider Benefits of Learning
Social Outcomes of Learning (SOL) Project
• Final publication: “Improving Health and Social Cohesion through Education”
(forthcoming, September, 2010).
Education and Social Progress (ESP) Project
• Proposed for 2011-12