Interventions in early childhood could prevent life-long skills gaps

Being born into a low-income family increases the likelihood that children will develop lifelong skills gaps, but with very early inventions that can be prevented, according to Aaron Sojourner, labor economist and associate professor at the University of Minnesota’s Carlson School of Management.

Sojourner presented an informational overview to the House Early Childhood Finance and Policy Committee Thursday on the impacts of economic disparities on children, as well as ways to counteract them.

Skills gaps tend to develop early, between the ages of 12 to 18 months, and have lifelong impacts on an individual’s participation in the labor market and contributions to the economy.

“These first few years is where these inequities get baked in and we really have the opportunity to invest and to prevent that from happening, and it is possible.” Sojourner said

Early investment can lead not only to stronger communities and a better quality of life for individuals, but also a substantial return on investment for society through eventual workforce contributions and productivity.

Citing research, Sojourner said spending more on early child care programs, particularly for low-income children, provides a return on investment for the economy of approximately 8%. The private capital in the stock market by comparison has averaged around 6% since World War II. 

In addition to closing skills gaps and bolstering the economy, Sojourner noted that additional early investments can also help address the child care crisis that arises from the discrepancy between what it costs providers to offer quality care and what parents can afford to pay.

Several committee members had follow-up questions and comments on the difference between what the state spends on children age 5-17 compared to those age 0-4, which averages $10,000 and $1,545 respectively.

“That’s of course the exact opposite of the direction that we know, in terms of the payoff,” said Rep. Dave Pinto (DFL-St. Paul), the committee chair “The biggest payoff is in the first 12 months, 36 months, and then we invest the opposite direction.”