Economist: Investing In Children’s Health Pays Long-term Dividends

At a Little Rock healthy child summit, a Minneapolis Federal Reserve Bank economist spotlighted the value of quality pre-school education and the economic returns it provides — a 16-to-1 benefit-cost ratio, he said.

Rob Grunewald, economist with the Federal Reserve Bank of Minneapolis, was the keynote speaker at the 2014 Healthy Child Summit held at Little Rock’s Embassy Suites. The summit is a collaboration between Arkansas Children’s Hospital and the Natural Wonders Partnership Council.

Grunewald discussed the “Perry Pre-school Study,” a research project started in the 1960’s. The study tracked 123 children from low-income families in Ypsilanti, Michigan through the age of 40.

The study showed that pre-school leads to higher achievement later in school, less need for special education, and fewer arrests. It also underscored that greater economic effects — such as home ownership, higher incomes and a better savings record — resulted from quality pre-school education.

“Investments in early childhood education can produce annual returns as high as 16 percent, adjusted for inflation, more than twice the long-run return to the stock market,” said Grunewald, co-author of the book, Early Childhood Development: Economic Development with a High Public Return.

“Children who reach kindergarten prepared to succeed in school are likely to perform well in school, graduate from high school and contribute to society and the economy. We all benefit,” he said. “However, children who reach kindergarten behind tend to stay behind. They are more likely to drop out of school, commit crime and require remedial programs, and we all pay the costs.”

The summit, which continues on Friday, is aimed at educating business leaders on the need for investing in children’s health for their employees and the longer-term benefits it can produce.

“We hope the Arkansas Healthy Child Summit, geared toward informing and engaging business leaders around child health issues will be the beginning of on-going conversation and collaborations among business, education, human service, and health leaders to move Arkansas forward,” said Marcy Doderer, CEO of Arkansas Children’s Hospital. “Just as Natural Wonders began such efforts in 2007, we have an opportunity to take the Coalition’s work to a broader and even more effective level.”

The discussion is likely to broaden into the political spectrum later this year.

Democratic gubernatorial nominee Mike Ross has made access to pre-K school a centerpiece of his education platform. Ross has proposed a gradual expansion of the Arkansas Better Chance (ABC) pre-K program that would eventually cost about $37 million a year when fully implemented.

“No child in Arkansas should be on a waiting list for pre-K,” Ross said at an April news conference.

Asa Hutchinson, the GOP nominee for Governor, said he supports increased funding for pre-K programs, but said it has to be done in a responsible budgeting manner.

Friday’s keynote speaker at the Arkansas Healthy Child Summit is Rob Bradham, vice president of Public Strategies for the Chattanooga Chamber of Commerce. He will also stress the economic value of early childhood health and development.