Little Money for Little Kids



For every dollar spent on children aged 0 to 5, three dollars is spent on children aged 6 to 12 in Latin America and the Caribbean. That is one of the unsettling findings of The Early Years: Child Well-Being and the Role of Public Policy, edited by Samuel Berlinski and Norbert Schady. This 2015 edition of the IDB’s flagship publication, Development in the Americas, was unveiled in Lima on Oct. 27.

Public spending

Public spending on early childhood is not only low relative to investment in middle childhood, but also with respect to spending on all other age groups. The elderly, in particular, receive pensions and other transfers to help them confront the risks linked to old age. This is true even in countries with very different population profiles. For instance, Chile, Guatemala, and Peru all spend between seven and nine times as much on the elderly as on children aged 0 to 5, measured on a per capita basis. When it comes to dishing out the budgetary pie, young children receive little more than crumbs

How does Latin America and the Caribbean compare to other regions when it comes to spending on early childhood? Not well. Countries in the region spend on average only 0.4% of GDP on their youngest children, about half the OECD average. Some high performing countries spend close to four times as much.



The good news is that although government spending on early childhood is low in relative terms, it has been on the upswing over the past decade. For example, Chile, the Dominican Republic, and Guatemala have boosted spending between two and four times since 2000. Most countries have pumped more money into preschools and conditional cash transfer programs while daycare and parenting programs have enjoyed more modest investment increases. This allocation is unfortunate as parenting programs, which receive the smallest allocation of overall budgets, have been shown to generate the greatest bang for the buck.

The region’s generally tight-fisted handling of little children reflects a poor investment decision. Spending on early childhood could be one of the best investments a government can make. To begin with, the earlier the government invests in a child, the longer the country has to reap the benefits. Moreover, the investments made on young children magnify the returns to investments made later in an individual’s life. For instance, spending on university education or training for someone who benefited from investment in her early years will likely have a greater payoff than money spent on an individual who did not enjoy quality care early on. Finally, the benefits of early investments show up well into adulthood. A study from Jamaica revealed that children who benefited from a parenting intervention in the first two years of their life and were followed twenty years later had higher IQs, earned 25% more, were less depressed, and were less likely to be involved in criminal activities than children who did not benefit from the intervention.

Of course, more money is not the whole answer. Another major message of the book is that quantity cannot substitute for quality when it comes to early childhood care. And quality is measured less in terms of bricks and mortar and more in terms of the intangible benefits of the interactions between caregivers and children.

By short-changing their youngest citizens, governments are missing an opportunity to impact not only the lives of their children but the well-being of their societies for decades to come. Happy, healthy, stimulated children grow up to be productive, participatory adults. And by targeting lower income children, early childhood spending can be an effective redistributional tool that can reduce the intergenerational transmission of poverty and inequality. A nation’s future is in the hands of its children. They need and deserve more than pennies to take on the task.

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Updated: November 3, 2015 — 3:49 pm

The Author

Rita Funaro

Rita Funaro

Rita Funaro is the coordinator of the Research Department's publications and dissemination program. Prior to joining RES, she served as the head of the dissemination program at the Inter-American Foundation and as a director of VenEconomia in Caracas, Venezuela. She received a BA from Harvard University and an MA in Latin American development from Georgetown University.

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