[IAEP] Economics of childhood programs

[Edward Cherlin]

On Thu, May 29, 2008 at 12:35 PM, Chris Leonard
<cjlhomeaddress at gmail.com> wrote:
> Here is a link to an interesting thought piece that was recently published
> by the Yoyodyne, er, I mean Rand Corporation.  It is an attempt to frame the
> argument for early-childhood interventions in economic terms, namely the
> creation of human capital.  The specific examples discussed are hypothetical
> and aimed at pre-school ages, but modulo the precise age range and
> hypothetical details, the argument is readily adaptable to thoughtful
> consideration of olpc efforts as a matter of public policy.
>
> The Economics of Early Childhood Policy
> What the Dismal Science Has to Say About Investing in Children
> http://rand.org/pubs/occasional_papers/OP227/
>
> "Economic analysis increasingly plays a role in the debate on the merits of
> early childhood programs, but many people are unprepared to participate in
> the discussion," said Rebecca Kilburn, the report's lead author and an
> economist at RAND, a nonprofit research organization. "The report is
> intended to provide clarity and structure for making use of such research."
>
> The coldly clinical language and the reduction of childhood tragedy to
> mathematical terms can be somewhat off-putting and it is clear that
> economics has earned itself the sobriquet of "the dismal science".  It is
> however a useful exercise to consider how to make the olpc "elevator pitch"
> to people of differing backgrounds and perspectives.  Folks at the the
> government ministry level may well be more attuned to arguments made using
> these metrics and such arguments may also be helpful in addressing some of
> the common themes of criticism to olpc approaches.

I have been doing this for more than a year. XOs are cheaper than
textbooks. Case closed.

Actually, I am writing an article on the consequences of the XO for
development, health, human rights, and other matters, including a
simplistic financial analysis of the ROI of buying laptops considering
only the resulting growth in GDP of the country. It's huge. Roughly a
$20 billion annual investment (once $75 laptops come in, assuming a
billion children getting laptops every four years) resulting in many
trillions of dollars of global growth in about a generation. Several
percent increases in growth rates for most developing countries. Lots
of stuff like that. Or as the report says, "...early childhood
programs have the potential to generate government savings that more
than repay their costs and
produce returns to society as a whole that outpace most public and
private investments."

There are other questions that we cannot address yet. How would
universal education and communications impact political organization
and media effectiveness, and hence reduction of corruption? What is
that worth to a country? We have lots of historical information, but
no predictive theory that I know of.

> To some extent it may also provide a framework in which proprietary versus
> open-source as upstream inputs going into the "material goods", "service
> inputs", "others time" and "others human capital" terms of the derived
> equations can be weighed and considered against each other.

There has been some work of this kind on Open Source. I claim that the
network effect of Open Source is already stronger than the network
effect of proprietary software such as Microsoft Windows, and even a
little stronger than Microsoft's illegitimate near-monopoly market
power. It is also increasing. But I am even more interested in the
extent to which computers and communications create better
approximations of the Perfect Competition which lies at the base of
Free Market theory. Not that I would dismiss the beneficial effects of
Open Source, but that I think these new effects will be greater.

> cjl
>
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>



-- 
Edward Cherlin
End Poverty at a Profit by teaching children business
http://www.EarthTreasury.org/
"The best way to predict the future is to invent it."--Alan Kay