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Jul 01 2016

Childhood Adversity: An Economic Perspective

By: Jennifer Medley, MA Home Visiting Section Chief, Arkansas Department of Health

When a child is born into and grows up in a home filled with adversity and chaos, they often suffer the consequences well into adulthood. These children are more at-risk for negative socio-emotional, educational, behavioral, developmental, and health outcomes throughout their lives.

Childhood adversity has many facets, including:

  • Poverty
  • Toxic stress
  • Lack of a nurturing home environment, including parental depression
  • Harsh parenting practices, including abuse, neglect, and maltreatment
  • Poor educational opportunities, attainment, and expectations
  • Fractured families, including incarcerated parents, and
  • Lack of access to critical preventive health care services

Children and Society Benefit from Early Investment

The good news is that home visiting programs can lessen the negative impacts of early adversity. They improve a child’s socio-emotional health, cognitive abilities, health, and opportunities over the course of his or her life. These programs have the ability to minimize the gaps that open up early in life between those who are advantaged and those who are disadvantaged and that are connected to adult outcomes in health and employment, specifically.

Investments in the early years also have a high rate of return. Estimates of the return on investment for home visiting range from $2.00 to $17.00 for every one dollar invested in high-quality, comprehensive programs that support children and families from birth. When investments such as these are made, there is a resulting decrease in the need for special education services, an increase in higher graduation and employment rates, a decrease in crime, and reduced use of the public welfare system.

Society also benefits from early interventions because they boost economic productivity. Research has shown that the rate of return per dollar invested is greater when invested from birth to age three because having a higher skill base at age three enhances individual productivity over time. As children grow older, the rate of return on that same dollar is reduced (See Figure a). What does this mean? Investing early and ensuring quality programs throughout childhood provides substantial gains in a range of outcomes for children and society as a whole.

The Economics of Equity

Underdeveloped human potential places a burden on the U.S. economy and creates a workforce that is less than it could be. Equity is a way to promote workforce productivity and economic efficiency. Quality educational opportunities for all children will allow the U.S. to develop a workforce that is capable, productive, and able to compete in the global economy.9

A number of factors affect health equity such as family history and genetics, parental health status and education, and family stability and environment. Although many of these characteristics cannot be altered, early childhood interventions provide a way to narrow the gaps between the advantaged and the disadvantaged, ultimately creating a more equitable and productive society. Overall, when investing in early childhood is a priority, the result is better outcomes for all involved.

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