Critical investment advice from fed chairman Ben Bernanke
On July 24, Dr. Ben Bernanke, chairman of the Board of Governors of the Federal Reserve System, gave a video keynote speech to 3,200 community and youth leaders attending the Children's Defense Fund's National Conference in Cincinnatinot on the details of national fiscal policy, but on the crucial importance of effective early childhood supports and public education to the success of our economy. His remarks were strongly reinforced by a very distinguished panel of leading scholars, educators and education activists who spoke about the national imperative of preparing all children for school and building a public education system that prepares all children and our nation for the future.
"At the Federal Reserve, we spend a lot of time looking at economic data, such as production and employment. In doing so, we try never to forget that these seemingly sterile numbers are in fact reflections of the economic aspirations, opportunities, and well-being of millions of Americans. When individuals are denied opportunities to reach their maximum potential, it harms not only those individuals, of course, but also the larger economy, which depends vitally on having a skilled productive workforce.
As a result, we all have a stake in the essential work that you are doing for our children.
So how can we improve the opportunities for all children and give them a chance to succeed in our ever-changing globalized economy? As the husband of a teacher and an educator myself, as well as a parent and former school board member, I know from personal experience that for creating opportunity and changing lives, there is no substitute for a quality education. The research shows that effective educations lead to lower rates of poverty, higher lifetime earnings, and greater satisfaction on the job and at home, and specialists in economic development have identified educational attainment as a key source of economic growth and rising incomes in many countries around the world.
Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Neuroscientists observe that if the first few years of a child's life includes support for healthy development in families and communities, the child is more likely to succeed in school and to contribute to society as an adult. Conversely, without support during these early years, a child is ultimately more likely to drop out of school, earn lower wages, depend on government programs, or be incarcerated.
Consistent with this research, early childhood education programs aim to nurture healthy development from the earliest years. Programs that provide enriched experiences for children and that also involve parents have been shown to benefit children from all backgrounds, but they have the strongest influence on children from disadvantaged environments. Importantly, state preschool assessments have shown that early childhood education programs make children better prepared for school, a precursor of future success.
The benefits of early childhood programs are not just short term in nature. Careful studies demonstrate that early interventions can have a positive effect on young children from low-income families that last well into adulthood. For example, analysis of one program shows that children who attended a high-quality, half-day preschool program at ages three and four were at age 40 more economically successful; for example, more likely to own their own homes than nonparticipants in a control group. In other evaluations, long-term benefits were demonstrated for a full-day early childhood education program starting before age one and for a nurse-based home visiting program. Economically speaking, early childhood programs are a good investment with inflation-adjusted annual rates of return on the funds dedicated to these programs estimated to reach 10 percent or higher. Very few alternative investments can promise that kind of return. Notably, a portion of these economic returns accrues to the children themselves and their families, but studies show that the rest of society enjoys the majority of the benefits, reflecting the many contributions that skills and productive workers make to the economy.
The Federal Reserve has long supported increasing educational opportunity for children, including the youngest. Federal Reserve banks have published articles and convened community forums on early childhood issues. For school-age children, we sponsor financial literacy and economic education programs, and for these programs, we make a special effort to reach schools with high proportions of minorities and lower income children. ...I hope we will one day achieve the Children's Defense Fund's goal of a level educational playing field for all children."
Another strong plea for early childhood and education investment at the conference came from former Proctor and Gamble chairman John Pepper who said: "I truly believe that...ensuring a level playing field for all children is the social justice issue of our time. It borders on being criminal to me to fail to give children and families who most need our help, childhood support that we know from experience will make a difference for a lifetime. Why is it that in all the campaign talk that we're hearing, almost none of it concerns this subject? We should expect and we should demand better. Not only, if I might conclude, is this the social justice issue of our time, it is also the economic issue of our time. We can talk about jobs till we're blue in the face, but none of it is going to happen if we continue to fail to support the development of those youngest people most in need. It doesn't have to be this way, and I hope it won't continue to be."
The Children's Defense Fund believes that the greatest threat to America's national military and economic security and democracy comes from no enemy without but from our failure to invest in and prepare all of our children for the future right now. Today, 60 percent of fourth and eighth grade public school students in all racial and income groups, more than 75 percent of Hispanic and more than 80 percent of Black children cannot read or do math at grade level. Only three percent of eligible infants and toddlers receive Early Head Start and our nation has been unwilling to ensure high quality universal pre-kindergarten and kindergarten systems to get all children ready for school or excellent and equitable public schools to ensure that children are college ready and prepared for productive work. A child unable to read or compute at grade level and graduate from high school college or workforce ready is being sentenced to social and economic death in our globalizing and competitive economy. Closing the achievement gap between non-poor and poor children and White and non-White children must be an urgent national priority. We know what to do; what we are missing is the public and political will to do it. It's time for urgent and transforming change for our children's and our nation's sake.