OREANDA-NEWS. October 28, 2015. Better investments in early childhood programs could yield big development dividends but many programs in Latin America and the Caribbean are underfunded and fail to focus on quality, according to a new report released today by the Inter-American Development Bank (IDB).

For every dollar spent on a child 5 and under, more than three dollars are spent on a child between the ages of 6 and 11, according to the study The Early Years: Child Well-Being and the Role of Public Policy, part of the IDB’s flagship Development in the Americas series.

However, the book urges more than an increase in spending in the early years. Governments need to rethink how and when they intervene in early childhood development, emphasizing more programs that improve the quality of interactions between adults – parents, teachers, daycare workers – and young children rather than focusing on building infrastructure.

“Development in early childhood casts a long shadow all the way into adulthood,” said Norbert Schady, the principal economic advisor to the IDB’s social sector and one of the study’s lead editors. “Spending on effective programs for young children has cascading positive impacts later in life and is a powerful tool for upwards socio-economic mobility. But for this to happen, government funded services in Latin America and the Caribbean need to be of a much higher quality.”

To be sure, countries have made big strides in reducing child poverty. Around 22 percent of children lived below the poverty line in 2013, down from 41 percent in 2000. Children today are taller and healthier than before, and much more likely to attend school.

Even so, spending on early childhood services and programs make up less than 6 percent of total social spending, which includes education, health, housing and social protection. As a percentage of GDP, Latin America and the Caribbean spends around half of the OECD average in pre-primary and daycare.

And deficiencies in the early years particularly impact the region’s poor, who are less likely to be school-ready than their better-off peers within the region and in developed countries. Tests show the youngest suffer key cognitive and language delays relative to the peers in developed nations. Vocabulary at early ages is a key predictor of school success and one study finds that, at age 5, children of mothers with low education levels recognize less than half the words recognized by children of mothers with higher education levels in a number of countries in the region.

Since skill formation is a cumulative process, the impact of spending more on our youngest citizens, and doing so effectively, can be dramatic. Investments in young children also have the highest returns when they target children who are most at-risk. The reverse is true for adults, where the highest returns to investments occur when they are made on people who are already highly skilled.

The book argues for a shift in public policy priorities. The study shows that home visit interventions produced average effects on cognitive skills about 10 times larger than daycare programs. And yet, many governments make the construction of new daycare centers a priority in their social spending on early childhood development.

In one study from Jamaica spanning several decades, children who benefited from a parenting intervention in the first two years of their life earned wages in adulthood that were 25 percent higher than comparable children who had not participated, and were less likely to depressed and engage in criminal activities in early adulthood.

Institutional deficiencies

Early childhood development also faces a major institutional challenge in the region. Programs for young children are offered by an array of actors, from health ministries to families and educators. The book notes there have been efforts to coordinate interventions in programs such as Chile Crece Contigo and Colombia’s De Cero a Siempre.

“The fact that no single actor ‘owns’ the issue of early childhood may be one of the reasons behind the low level of expenditures in the sector,” said Samuel Berlinski, an economist with the IDB’s research department and co-editor of the book. “A consolidated governance structure should clearly define roles, planning, quality standards and other key elements, holding everyone accountable and emphasizing monitoring and rigorous evaluations.”

Human capacity is also a major problem. Early childhood educators often are considered lower-tier workers within the education profession. Many countries suffer from shortage of qualified early childhood educators in poorer areas, precisely where the returns to their skills are likely to be highest.

The study notes that improving access is “straightforward, but improving quality is not” and that improving quality is “painstaking work – more difficult than building roads or bridges, and much less glamorous than inaugurating new daycare centers.”

About the IDB

The Inter-American Development Bank is the most important source of development financing and technical assistance for Latin America and the Caribbean. The bank seeks to improve the quality of life of the people in the region, working together with its member countries to contribute to the application of novel solutions to the problems of development.