The importance of preschool education for child development and international experiences in expanding coverage Presentation by Jan van Ravens at the conference on: “Investing in Early Childhood Education in Serbia” 25 September 2012 Hotel Park, Belgrade

Economics of Early Childhood “On a purely economic basis, it makes a lot of sense to invest in the young… Early learning begets later learning. And early success breeds later success.” --James J. Heckman, Ph.D. Nobel Prize Laureate Economist

Early Intervention and Early Childhood The cumulative deficit, shown here, represents the idea that the later the investment in improved caring for a child , the wider the gap that has to be closed. This is illustrated by showing the top curve, which represents the normal course of development, and the bottom curve, which shows the course of development for a child who is “developmentally delayed” - in other words, has a slower rate of development, and may be at risk for mental retardation. The key message is that the later you intervene, the greater the gap that has to be closed. The Y axis (vertical) is the child’s developmental level - both cognitive and social. The X axis (horizontal) is the age period. The list of factors on the right side of the graph represent all of the factors that may affect the magnitude of the developmental delay. Some of these are characteristics of the individual, such as responsiveness, and others are characteristics of the situation (timing, intensity of the intervention, breadth of the intervention), and a third refer to cultural and developmental appropriateness. This chart is from Ramey and Ramey, Am Psychologist. (1999). Ramey & Ramey (1999). American Psychologist. Engle, P. (2005). Developmental Readiness.

Approach 1: comparing countries This analysis was published in the leading journal The Lancet (23 September 2011) Authors compared low and middle income countries with a total of 2.7 billion inhabitants Used three scenarios: 25% , 35% or 50% increase in preschool enrolment Estimated the gains in terms of educational attainment and, from there, of GNP growth And found a benefit to cost ratio of 6.4 to 17.6 (depending on initial preschool enrolment; on discount rate; and on which scenario)

Approach 2: comparing children A preschool program in the USA Comparing treatment group and control group Benefit to cost ratio of 17, by the age of 40 Benefits and costs per participant in US$ (constant 2000) and with 3% discount rate One of the most well-known findings of this study is that the preschool program had a large return on investment. The best estimate, using a 3% discount rate, which is similar to an interest rate over and above inflation, is that for each dollar invested, the program returned $12.90 to the public and $4.10 to participants, for a total return of $17.07. As the graph shows, the sources of the return were savings in welfare, education due to less need for special education classes, greater earnings of participants, higher taxes paid on greater earnings, and both criminal justice system and victim costs of crime. Savings in crime costs alone were over 11 times the cost of the program, but even with the crime savings, the program paid for itself. Some would say at $8,500 a year per child, the program is too expensive. But the public cost of every poor child who does not receive this program is not zero, but almost $200,000. Why do we keep choosing to spend $200,000 on big problems that we could prevent by spending $15,000? Government deficits are real, large, and growing. A major reason for them is our failure to make early childhood investments that significantly reduce our social problems before they get out of hand.

Disadvantaged children benefit most

A quick look into the “Black Box”

Looking to the West...... For Serbia: enrolment in pre-primary in 2009 at ages 3-5.5: 48% For EU-countries: enrolment in pre-primary among 3 and 4 year olds in 2005-2006. For UK: only 3 year olds. At age 4, 90% of children are either in pre-primary or primary

... and looking to the East Enrolment at ages 3-6 by GDP per capita Note: from international data-base. Data for Serbia may differ from national sources.

Wealth disparities (% children 36-59 months attending early education)

Short programs seem 4 to 6 times less costly than full-day programs Currency Unit cost full-day Unit cost half-day Ratio: full / half Armenia US$ 216 34.2 6.32 Kyrgyzstan Som 6010 1670 3.60 Macedonia Denar 71590 11139 6.43 Poland Zloty 4500 1200 3.75

Short or Fullday: some examples Kyrgyzstan: rapid expansion of short programs, initiated by NGOs but taken ove by Government Poland: “where there are no Preschools” Big differences in West-Europe, for example: Belgium. From age 2.5 onwards: fullday care in small groups with close to 100% enrolment in public institutions. Same in France and Italy. Netherlands. Only from age 4: school-based program of 5 hours per day on average in large groups. No meals or beds. Childcare mainly private. Special programs for disadvantaged.

How to finance scale up Expand gradually: first from age 4, then from age 3 Use existing preschool budget: Raise efficiency Raise full-day fee selectively (social justice) Use ‘demographic dividend’: Use existing space in schools Retrain primary teachers

Main conclusions Serbia has every chance to expand coverage of preschool education, provided that we: promote enrolment in short programs, and convince parents who do not need daycare Serbia should first focus on the poorest but eventually aim at universal coverage: 48% of the children are already on board! children in the middle groups benefit as well (A Vision for Universal Preschool Education. Zigler, Gilliam and Jones, 2006)