How and where to cut federal spending will be one of the top debates in the next Congress, and a Nobel Prize-winning economist argues that balancing the budget and stimulating economic growth begins with investing in early learning.

If budget hawks want to create a more responsible federal budget, they need to look at both current costs and investments that will save the most in the future, University of Chicago economist James Heckman (http://www.heckmanequation.org) writes in a letter to the bipartisan panel preparing a report on reforming the federal budget. Heckman argues the best way to build a more competitive workforce and boost productivity is by investing in early childhood development.

Birth to five early childhood education for disadvantaged children is a cost efficient and effective investment in preventing downstream problems in education, health, social and economic productivity that place large burdens on local, state and national budgets, as well as weaken our global competitiveness and security. – Letter to the National Commission on Fiscal Responsibility and Budget Reform, James Heckman, University of Chicago.

The basic idea is to increase investment in socio-emotional and cognitive development during the first five years of life, which in turn would create a more effective workforce and would cut government spending on everything from crime prevention to closing the achievement gap.

Fiscal responsibility is not simply reducing costs. Fiscal responsibility is looking at costs and returns—and investing resources where returns are the greatest with the least amount of risk. Evidence shows that supplementing the family environments of disadvantaged children with education resources is the most effective and cost-efficient way to provide equal opportunity, greater achievement and stronger economic success. – Letter to commission.

Heckman goes on to suggest five general recommendations, including:

• Expand proven models, such as the Perry Preschool and Abecedarian projects
• Invest significant amounts of money in early learning programs for disadvantaged children

It is something for which we must find the dollars because it saves money as early as kindergarten and builds equity throughout the life of the child. Early childhood education creates ataxpayer who reduces his or her own tax burden through greater productivity, healthier living and stronger contributions to society.Check out the entire 12-page letter for Heckman’s analysis and argument.   

(Thanks to Birth to Five Policy Alliance for highlighting this letter.)