He isnt kidding around
West Michigan economist Timothy Bartik feels that educating children at an early age is as much of an economic development tool as business tax cuts and tax incentives. In fact, Bartik feels so strongly about the issue that he wrote a book called “Investing in Kids: Early Childhood Programs and Local Economic Development.”
The perspective Bartik offers on developing a local economy isn’t exclusive to him, but it is fairly out of the norm, especially when consideration is given to the discussion that usually occurs around the topic. Normally, increasing economic activity and creating jobs begins with reducing taxes for businesses and ends with adding tax incentives for them.
“I think economic development, properly defined, has a goal of raising per-capita earnings. Now, usually people think about doing that by directly targeting jobs through tax incentives. But you can also work on the labor-supply side of the market and increase the quantity or quality of labor supply,” said Bartik, who has been with the W.E. Upjohn Institute for Employment Research in Kalamazoo since 1989.
“There obviously are a number of ways you can do that, and early childhood programs happen to have this distinction of being one of the ways that has the most rigorous evidence of a pretty high bang for the buck. In terms of dollars invested, you’ve got a pretty big increase in labor force quality,” he added.
Bartik pointed out in his book, which was released in January, that the gain not only works nationally but also at the state and local economic levels. The reason for that is studies have shown that roughly three-fifths of individuals who receive an early and a quality education spend most of their working careers in the states they were raised in, and about half in metropolitan areas do the same.
“It doesn’t actually vary much in states with depressed economies, by the way. It’s not like it’s lower for Michigan than for some more booming states. So the logic is, if you want to boost per-capita earnings in your state, you can either directly try to deal with business costs by working with business taxes or business tax incentives — and I’m not saying that’s without merit, but that’s one approach. But a second approach is to work on the supply side by increasing the quality of labor, and early childhood programs do that,” he said.
Bartik admitted that those results won’t show up immediately, although he offered a few short-term benefits from beginning to teach kids at age 4. He said these programs reduce the need for special education classes, which costs about $10,000 a year for each child enrolled, and in turn lowers the overall cost for elementary education. The money saved from fewer special education classes can then be used to pay for early childhood development programs.
“Then there is considerable evidence that suggests early childhood programs, in a high-quality way, might raise property values because they raise elementary school test scores. And we know that elementary school test scores are one of the drivers of home values,” he said.
Then there are random assignment studies, like one done in Ypsilanti. The study followed kids who went to pre-school there in the 1960s and are now in their 40s. Bartik said the study provided a long-term perspective of the role that an early childhood development program played in their lives. The results of early learners were compared to adults who didn’t receive that early education, and those who didn’t get the head start didn’t fare as well in their careers.
“So we know a lot more about the effectiveness of pre-school. There also are similar studies of very high-quality childcare programs that have been done. There are a limited number of long-term follow-ups, but there are a lot of good studies showing effectiveness in some of these programs,” he said.
The federal Head Start program and the state’s Great Start Readiness Program were two that Bartik cited as being worthwhile efforts to prepare kids for learning. But he didn’t stop with education-only programs. He also said high-quality childcare centers need to be included because the good ones also provide an educational function. Visiting nurses programs that work with expecting and young mothers also qualify. Those efforts help with parenting techniques and with getting a mom’s life together, which helps with properly raising children. “There are a number of studies showing it has beneficial effects not only on the mom, but on the kid in terms of test scores and whether the kid gets involved in juvenile crime,” he said.
Bartik said the glass was half-full and half-empty when he was asked how he felt the governor and state lawmakers are currently treating early childhood development programs. On the positive side, he said he liked Gov. Rick Snyder’s proposal to put all these programs under the control of the Department of Education, which normally only oversees pre-school programs, instead of traditionally having some of the efforts managed by a welfare agency.
“If it’s done right, it should result in more effective regulation of the quality of these things and better-coordinated programs,” he said. “That’s a positive.” Bartik said another positive is funding for early education was frozen at the state level in the governor’s proposed budget, even though Snyder has endorsed big cuts to the public elementary school system.
But Bartik said the other side of the coin shows that the governor didn’t propose adding more funds to the programs. “Then you get into the debate on how can you increase funds when the economy and the budget is in such bad shape. But, obviously, you can to some extent, even though the budget was in bad shape. The governor’s proposed budget had a $1.8 billion business tax cut, so apparently there were funds for that,” he said.
Bartik said Michigan currently spends a tad under $100 million a year for state-supported pre-schools. The enrollment in these programs is 16 percent of all the state’s 4-year-olds and is below the national average of 26 percent. To reach the national figure in Michigan, Bartik felt Lansing would have to spend about another $65 million a year. He said a rule of thumb is that states provide 70 percent of all pre-school dollars. “The three leading states in access to pre-school right now are Oklahoma, Georgia and Florida,” he said.
Bartik, who has a lengthy track record of researching economic development issues, said a call from a national business group, the Committee for Economic Development, ultimately prompted him to write the book. The committee asked him to compare the return on investment from business incentives with the similar return from universal pre-school, and he did that piece in 2005. Doing that paper got Bartik interested in looking into the subject even deeper, and his book was the result. The book is available at Amazon.com and from the Upjohn Institute.
“One of the things I’ve always pushed in my analysis of business incentives is that the point of these is not simply to attract jobs. The point is to build standards of living. So I’ve always advocated, in the case of business tax incentives, that you need not only to look at how many jobs you attract; you need to look at what the wage rates of the jobs are and you need to look at who gets the jobs,” he said, adding that his blog on this subject can be found at investinginkids.net.
“You’re not building per-capita earnings if you attract 100 jobs, and all 100 jobs go to people who move in. That doesn’t build per-capita earnings. You actually have to get, at some point, some of the jobs to go to people who otherwise would not be employed. The goal is not simply growth; the goal is better labor opportunities for state and local residents.”
Bartik brings more of a public perspective to the economic development table with his emphasis on per-capita earnings, putting residents to work and getting youngsters into the educational system as early as humanly possible. For him, that’s a fitting perspective as he served on the Kalamazoo Public Schools Board from 2000 to 2008, and presided over the board when the groundbreaking Kalamazoo Promise was unveiled.
“Although the Kalamazoo Promise is working on a different part of the educational pipeline, it’s also premised on the notion that education programs can be economic development programs. Because the whole premise of the Kalamazoo Promise was, by offering this free or reduced (college) tuition, it would build the skills of local residents and also attract parents,” said Bartik.
“Again, high-quality pre-school can offer the same thing. It can build the skills of today’s preschoolers for tomorrow’s work force. On the other hand, since parents care about kids acquiring skills, you can attract parents, too.”