The Economic Rationale for Investing in Children: A Focus on Child Care. What Are the Goals of Public Investments in Children?


By focusing exclusively on measures of the utilization of health care, much of the discussion of child health programs implicitly assumes that the goal of such programs should be to equalize access to health care across groups of differing socioeconomic status. According to this viewpoint, additional doctor visits for poor children are desirable, if wealthier children are obtaining these services. Alternatively, one may take a different approach, and assume that the goal of public policy should be to improve health. Given this point of view, additional doctor visits for children who are already healthy and who are receiving adequate preventive care are socially wasteful, and not a desirable outcome of health policy, regardless of the socioeconomic status of the children who receive them.

The idea that child health policy should aim to improve child health is supported by increasing evidence that adult outcomes are affected by child health. Adult health may be directly affected by child health. For example, David Barker and his colleagues have linked a number of adult disorders, including heart disease, to under-nutrition of the mother during critical gestational periods (c.f. Barker and Martyn, 1992). Since health affects wages and labor force participation (c.f. Currie and Madrian, 1998), poor health in childhood can lead directly to lower future wages and participation. Child health may also be linked to adult labor market success, through its effects on schooling attainment (c.f. Grossman, 2000). Some of the effect of health on schooling is through mechanisms such as days lost. Some of it is also likely to be through effects on cognition. Currie (2000) provides a review of some of the large literature linking indicators of child health status to cognitive outcomes. Thus the evidence suggests that investments in child health pay off in the form of better adult health, and superior educational outcomes, labor force participation, and wages.

This discussion has several implications for child care policy. First, there may be similar confusions or conflicts regarding the goals of child care policy. These goals may include: The provision of early intervention services to disadvantaged children; support of working mothers; enhancement of child cognitive skills; and socialization of children. Policies that provide services to the maximum number of mothers may not be those that most effectively enhance child development. Targeting needy children for services may miss other children who could also benefit from quality child care. And child care centers that promote social skills may not be the most effective at also enhancing the cognitive skills necessary for success in life. While it may be unrealistic to expect unanimous agreement on the priority that should be given to different child care policy goals, a recognition that goals can conflict is likely to be helpful to policy discussion and evaluation. Second, hard evidence that quality child care matters for future outcomes is likely to be essential to building and maintaining support for child care programs.