The Economic Rationale for Investing in Children: A Focus on Child Care. The Importance of Non-Medical Threats to Health


Although the bulk of this essay focuses on the effects of recent extensions of health insurance coverage, it is important to remember that health care is only one input into the production of child health, and there is overwhelming evidence that in most cases it is far from the most important input. Improvements in standards of living, advances in knowledge about disease and hygiene, and public health measures such as improved sanitation and the provision of clean drinking water have done more to improve child health in the past 150 years than even the most spectacular advances in personal medical care (Preston, 1977). Today, accidents and violence are the major killers of young children in wealthy countries after the first year of life (Unicef, 2001). Accidents are often viewed as unavoidable and violence is seen as a problem for the criminal justice system rather than a public health problem. Yet variation in rates of death from these causes across countries suggests that many deaths could be prevented. For example, in the U.S. there were approximately 25 accidental deaths per 100,000 children 1 to 14 per year in the 1990s compared to 13 deaths per 100,000 in Sweden over the same period. Moreover, substance abuse and poor eating habits threaten children from conception and into adulthood.

Currie and Hotz (2001) show that some types of child care regulation, and particularly minimum educational requirements for care givers in day cares, are effective in preventing accidental deaths in children. Thus, there may be some scope for child care policy to directly affect health outcomes, although most accidents occur outside child care settings.

Similarly, although quality child care may improve child outcomes (and poor quality child care can harm children), it is important to remember that families are the most important overall contributors to child well-being. The NICHD Study of Early Child Care found that child care situations with better "structures" as measured by safer, cleaner, more stimulating environments and better child-staff ratios also tended to be better in terms of "classroom process"  that is, caregivers who were more sensitive to the children and provided more cognitively stimulating care (NICHD Early Child Care Research Network, 1999). However, the study found that family income, maternal vocabulary, home environment and maternal cognitive stimulation were much stronger predictors of children's behavior problems and cognitive development than any characteristics of the child care they were in (NICHD Early Child Care Research Network, 2000). Thus, programs such as Head Start, which emphasize a holistic approach to assisting preschool children from needy families, may be on the right track, though this aspect of Head Start has not been subject to rigorous evaluation.(5)