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Social Outcomes of ECEC - Case for public investment?

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?. Externality : ECEC improves individual’s social outcomes (eg, health and social cohesion) which brings significant benefits to others.

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Social Outcomes of ECEC - Case for public investment?

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

  2. Is there a case for public investment in ECEC? • Externality: ECEC improves individual’s social outcomes (eg, health and social cohesion) which brings significant benefits to others. • Efficiency of investing early versus later in the lifecycle (technology of skill formation). • Cost-effectiveness: ECEC can be considered to be among the cost-effective class of interventions tackling health and crime. • Tackling inequality: Early investment in the disadvantaged groups can be a cost-effective way to reduce inequalities in social outcomes.

  3. 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.

  4. 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)

  5. Skills interact -Smoking at age 16 in the UK Likelihood of smoking Source: Carneiro, Crawford and Goodman (2006)

  6. 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” ?

  7. More police officers versusMore high-school graduates? (USA) • Costs of hiring a police officer: $ 80,000/year • Benefits from reduced crime: $ 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)

  8. 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” ?

  9. 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.

  10. 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

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