In an Australian first, the new economic study shows that investment in early childhood education boosts productivity and increases workforce participation, while addressing developmental vulnerability in children.
PwC chief economist Jeremy Thorpe said his team also analysed the substantial impact early learning has on children’s development.
“Using the best available Australian and international research we were able to estimate the impact of early childhood education on early school achievement, and then the likely uplift in achievement at Year 3 and throughout the rest of their education,” Mr Thorpe said.
“The evidence suggests that if early childhood education puts students ahead at the start of primary school, the benefits will increase as they progress through the education system.”
The Front Project, a business advocacy group supporting investing in the early years, commissioned the report, noting that 65 per cent of children today will do jobs that have not been invented yet.
“Early learning develops the skills needed to engage in life-long education and succeed through career changes, and we now have the data that shows Australia’s universal early childhood education policy could double the return on investment,” CEO Jane Hunt said.
“That’s higher than many of our nation-building infrastructure projects. The benefits of early education can be seen immediately, and returns continue as those kids become adults."
The research adds weight to the efforts of Goodstart and the early learning sector to get the Federal Government to commit to funding preschool programs beyond 2020.
Goodstart advocacy manager John Cherry said the report adds to the compelling case for Governments to continue to fund access for all Australian children to attend preschool in the years before school.
“We already knew that children who attended preschool were better prepared to start school and achieved 20-30 points higher in literacy and numeracy tests in Year 3,” Mr Cherry said.
“Now we know that investing in preschool will also boost the economy, with $4.7 billion of future benefits for each $2.3 billion of annual provision of preschool.”
The report found that the states are the largest funders of preschool providing $1 billion a year, while the Commonwealth provides $823m a year. Parent fees make up the rest of the cost - $501m. Australia has the second highest parent contribution to preschool costs – only in Japan are parents expected to contribute more.
Goodstart is Australia’s largest non-government provider of preschool - around half of Australia’s four year olds access preschool programs through long day care centres. The other half attend Government and community run preschools.