More Bang for the Buck: Investing in Early Childhood Development

Abstract

Spending resources on early childhood may be one of the best investments a government can make. To begin with, the earlier the government invests in a child, the longer the country has to reap the benefits. Moreover, the rate of return to some investments may be lower if made later in life (e.g., it may be hard to achieve gains in IQ after a certain age). Finally, investments in early childhood development generate potential ripple effects on investments made later on; in other words, the returns to investment in human capital are higher if investments were made in the early years. Also, disparities in child development outcomes are present before children enter primary school. Public investment in early childhood can be a powerful equalizing force. Do government spending priorities reflect these opportunities? How can governments in Latin American and Caribbean countries maximize the returns to investments in early childhood development?