Unequal at the start: early childhood programs pay dividends for life.

• Author: O'Leary, Ann
• Position: AMERICAN LIFE: AN INVESTOR'S GUIDE

No child wants to hear that they will receive a smaller share of pie. Yet, over the next decade, the share of government funding for children's programs and tax credits will shrink by about a quarter, from 10.2 percent to 7.8 percent, according to a recent report by the Urban Institute. Cutting back on investments during a child's youngest years can have serious long-term ripple effects well into adulthood; research finds that children's early language development, understanding of math concepts, and social-emotional stability at age five not only predict how well they will do in school but also largely determine their adult earnings.

One study, for example, finds that children's test scores in early elementary school largely explain the variation in their adult wages. Specifically, children who scored in the bottom 25 percent in these tests earned 20 percent less at age thirty-three than their counterparts who scored in the top 25 percent. The upshot is that on the day children arrive at kindergarten, one can already reasonably predict how much each will earn as an adult.

These findings have real implications for the investments we need to make to sustain a strong economy and to support today's youngest Americans--Generation Z, or those born in the twenty-first century. (This cohort is smaller than the Millennial generation but still growing, and it is even more racially and ethnically diverse.) Human capital--the level of education, skills, and talent in our workforce--is a main driver of economic growth, so in order to ensure that we have a healthy, productive workforce and a thriving economy in the decades to come, we must begin by developing human capital during early childhood through education and other enrichment activities.

Yet we already know that the older members of Generation Z in the United States are falling behind their teenage peers in other developed economies. The most recent data findings from the new Programme for International Student Assessment, the most-cited international educational ranking, finds that out of thirty-four developed countries, U.S. teenagers rank seventeenth in reading, twenty-first in science, and twenty-sixth in math.

Nothing is more important to the future of our nation than preparing our youngest generation to meet the unpredictable economic challenges of the 2020s and 2030s. Yet rising economic inequality and unstable economic growth define our society today, and this inequality and instability...