Keeping our Eyes on the Right Targets

Education and the Economy

by Jean Moon
July 2011

Public funding of education in the United States has deep roots.  The constitution in my own state of Maine, written in 1820, called for public education, “education being essential to the preservation of the rights and liberties of the people.”  Over time Maine policy makers and citizens, as in most states, have demonstrated an abiding faith in these words, in the centrality of education for the well-being of the individual and the state. 

Support for public education has remained steadfast despite decade after decade of increased costs associated with delivering it.  It is not unusual to find support for public K-12 and higher education occupying close to 50% of a state’s budget. Despite proven faithfulness to the promise of these investments questions continue to mount, especially in these times of scarce resources. Are investments demonstrating a proportional return to a state in workforce quality, quality of life to the individual citizen, and in leveraging precious resources to achieve greater long-term growth in the state’s economy?

The seismic blows dealt to state and federal budgets in 2007 are now being realized at the state level. It is a bleak picture. More than ever, as it should be, educational investments and state-based economic growth is a topic of growing concern. A critical part of these discussions are laced with increasing frustrations over ever raising dropout rates across K-12  as well as in community colleges and 4-year institutions.

The State of Affairs

According to the Alliance for Excellent Education only 69% of students in public education in the United States complete high school.  In the context of community colleges only one third of the students who enroll with the intention of achieving a degree do so within a six-year span of time.  National statistics suggest almost half of the students who start community college do not return for a second year. 

Again, taking my state of Maine as an example, it is projected that the state’s economy would see a combination of crime-related savings and additional revenue of about $14.7 million each year if the male high school graduation rate increased by just 5%. The recently released Maine Juvenile Justice Task Force Report indicates that 54.1% of adult prisoners in Maine had less than a high school education, 11.1% had less than a 9th grade education. Without a doubt, and there is a high stack of  studies demonstrating such, improved rates of graduation, certification, and degree completion at all levels of education have profound long term economic impacts on the well-being of the individual and the state.  

To paraphrase current U.S. Under Secretary of Education, Martha Kanter, we are going to have to educate ourselves to a better economy.  Leaving school, at any point along the K-14 or 16 continuum, is not an option if the goal is to grow an employable workforce and an adaptive and healthy economy. This kind of economy requires keeping more students of all ages interested and in school and graduating.  This is a core message for policy makers and parents, for taxpayers and students, for all committed to the health and well being of this country. At the same time we need to be realistic about how to keep young children, aspiring adolescents, adolescents, young adults, and maturing adults in a productive, lifelong relationship with learning.  This relationship is critical not only for self-development, future workforce goals, but for the economic survival of the states.

How to Make the Smart Choices about Education and the Economy

There is some promising news to guide states with what are and will be exceedingly tough choices about where to put scarce dollars. If the goal is to make educational investments pay off in terms of an employable and skilled workforce and to contain expenditures on social services and health care, states need to make investments in at the front end of the pipeline.

Investments strategies and proven practices in early childhood education (Pre-K) are instructive. A case in point is a recent study by Wilder Research focused on long-term investments by the state of Michigan in early education services.  Issued in 2009 this study identifies cost savings and revenues realized in 2009 because of investments made in building school readiness capacity in young children in Michigan over the past 25 years.  Report authors estimated that those cost savings were around $1.15 billion dollars. 

Other studies mirror the Wilder findings including a recent study released by the University of Minnesota.  Investments in early learning experiences pay off, especially where the need is greatest – among children in low-income families, rural and urban. Evidence increasingly suggests that when states incorporate early childhood education into their overall public education delivery they are making smart investments. Evidence of impact gets even better when investments in early childhood education are linked to critical social and health services for these children.  Below are some specific findings from the Wilder report.

  1. Reduced special education spending

  2. Fewer K-12 students repeated a grade

  3. Overall decrease in the high school dropout rate.

  4. A greater proportion of adults 18 to 29 entered the workforce.

  5. Reduce spending by the state on welfare and Medicaid due to the improved employment outcomes for disadvantaged children who have reached adulthood.

  6. Reduction in health care costs due to less alcohol and drug abuse among teenagers and adults who benefited from school readiness programs when they were children.

Increasingly research is being done on the benefits of exposing young children in appropriate ways to key ideas in the subject domains and practices they will encounter in first, second and third grade. The cognitive capacity of young children is much greater than the work of early childhood research Jean Piaget suggested.  We know more now about how children learn and we should act upon this knowledge.

It is clear that states cannot by themselves do the work of creating robust early childhood education programs, though state policy makers can do a great deal to create a policy environment receptive to investments in early childhood education and private sectors partners wanting to link public and private dollars.  What is needed is the best of public-private partnerships like the one just underway in Illinois spearheaded by the Robert R. McCormick Foundation.  This public-private partnership seeks to put into place a statewide system of early childhood education, from ages 3 to 8, with particular emphasis on low-income children in Chicago.   It is an impressive commitment.

Changing Course

The model of public education we now have in place in most states begins the process in Kindergarten. What we are finding is that to make public education work for all we need to begin the process much earlier, when children are three and four.  What’s the rush?   It is not a rush. It is a growing evidence-based call to action.  Certain populations of children, many without parents or a home environment to support early learning, are arriving in Kindergarten woefully behind their peers in understanding numbers, reading, and language development.  These children generally do not catch up even if they teachers who are exceptional.  These are the conditions that produce drop-outs, increase state expenditures, depress state economies and depress state-based opportunities for innovation due to workforce limitations.

Education and the economy share an interdependency that is too often not recognized or is underappreciated.  Especially in these challenging economic times, this interdependency needs to be foremost in the minds of all policy makers, parents, private sector stakeholders, and the public at large. Secretary Kanter is right.  We do need to educate ourselves to a better economy.  And I would add, to a better understanding of early learning for all.


copyright 2011 by Jean Moon