Media coverage of the February 10 COAG (Council of Australian Governments) meeting focused on the need to expand the health workforce and improve mental health care. Lost amidst the flurry of headlines, a background paper discussing early childhood education and care has the potential to contribute more to the future wellbeing of Australia than anything else discussed that day by our national leaders.
The COAG National Reform Agenda noted that a healthy, skilled and motivated population is critical to workforce participation and productivity, and hence Australia’s future living standards .The human capital stream of reform aims to provide Australians with the opportunities and choices they need to lead active and productive lives. COAG noted that policies to improve health and education outcomes, and encourage and support work, are closely inter-related. COAG agreed to play a leadership role to facilitate policy integration and the adoption of a longer-term policy perspective across governments and portfolios.
The human capital agenda outlined by COAG represents an ambitious partnership. Our political leaders agreed that to achieve the level and breadth of progress our nation needs, all governments would commit to reform across health, education and training and encouraging and supporting work. They noted that in some cases there was agreement on what should be done in general terms whereas in others, a number of diverse and innovative approaches need to be tried.
Critical to the success of this initiative is improving early childhood development outcomes through a collaborative national approach. COAG noted the importance of all children having a good start to life. Opportunities to improve children’s life chances, especially for children born into disadvantaged families, exist well before children begin school, and even before birth.
COAG also noted that high quality and integrated early childhood education and care services (including health services for young children and their families), from before birth up to and including the transition to the first years of school, are critical to increasing the proportion of children entering school with the basic skills for life and learning. So too, it should be added, are work-family policies that provide parents with a realistic choice to take time out from work to facilitate the growth of strong attachment relationships with their newborn. This is key to the growth of the young child’s self-regulatory capacity which is a fundamental skill underpinning competence in emotional and cognitive development and the growth of human capital.
The timing of the COAG announcement was exquisite, coming at the end of a week in which Nobel Economics laureate (2000) James Heckman had addressed a series of meetings in Sydney, Canberra and Melbourne on the economic efficiency of investing in early childhood – meetings which were exceptionally well-covered in mainstream media. Heckman’s visit had been organised by NIFTeY Australia (National Investment for the Early Years) to coincide with their national conference in Sydney called Prevention: Invest Now or Pay Later. Heckman argued that given the compelling evidence on the impact of home and centre-based early childhood development and parent support, it makes sense to shift the balance of investment in human capital development from downstream remediation to upstream prevention and early intervention. He cited results from initiatives such as David Olds and colleague’s Nurse Family Partnership involving home visits by nurses from pregnancy to the second birthday, and the Perry Preschool and other centre or home-based intervention programs. With returns on investment of around 18% per annum, he compared their value favourably with his own work examining the economic benefits of later job-training programs. He noted that early intervention promoted schooling and workforce productivity (human capital) and reduced teenage pregnancies.
Heckman concluded that the economic case — illustrated in the accompanying figure – was supported by what he termed the technology of skill formation, a complementary understanding of the dynamics of human capital development. He emphasised that because early skills lay the foundation for the acquisition of later skills; downstream remediation for adolescents and young adults is much more costly in producing the same level of skill attainment in adulthood. Socio-emotional and relationship skills, including motivation, perseverance and tenacity, are important for success in all aspects of life. Heckman showed that families — which are under stress throughout the industrialised world — are critical in the formation of these skills.
The development of the capacity to self-regulate behaviour — and its impact on academic outcomes and criminal behaviour — was emphasised by another of the keynotes at the NIFTeY conference, Richard Tremblay, a French-Canadian developmental psychologist from Montreal. Tremblay has spent his career examining the trajectories of physical aggression from early childhood and has concluded from a range of studies that aggression is not a learned response; rather individuals learn not to aggress. This work shows that the capacity to learn, whilst influenced by genetics and temperament, is increasingly influenced by the environment as children get older, specially the characteristics — both structural and behavioural – of families.
The failure of the mainstream media to connect with what Heckman had been saying and the emphasis COAG had placed on the importance of human capital development, whilst disconcerting, is perhaps indicative that the media operates in silos just as other systems do. Editorial writers failed to do the connecting job that one might have expected of them. However, other economics writers recognised the link, including ANU economist Andrew Leigh, SMH Economics Editor Ross Gittens and Nicholas Gruen in the Brisbane Courier Mail. Each picked up the Heckman message and recognised that strategies to promote human capital development have to start before school entry. Gruen notes that Heckman’s argument is that it is families rather than schools that provide the crucial developmental building blocks that inculcate intellectual and ‘non-cognitive’ skills, like motivation, dependability and social skills. He goes on to note that Heckman’s message is confronting because, if families rather than social institutions like schools dominate the action, they perpetuate intergenerational inequality so it’s that much harder to engineer a fairer society.
Clearly when the damage to human capital development has already been done in early childhood, the balance of policy effort needs to shift from schools, job training and prisons to things that need to be done during the early years of life.
To reduce the deteriorating indicators of health and wellbeing in children and young people, particularly amongst those most disadvantaged, we can; shift the work-family balance to allow parents more time for nurturing and enjoyment of the precious early childhood years; build the quality of relationships between young children and their parents; and provide high quality early education and care. These steps are important not just because they’re good for children, but because they are one of the most important investments we can make for the future wellbeing of Australia. If we are wise enough to read the warning signs already present, these policy issues should be barbecue stoppers now, not when hitting the iceberg becomes inevitable.