Territory Stories

The value of investment in the early years



The value of investment in the early years

Other title

Balancing costs of childhood services


Menzies School of Health Research

Sponsored by

Northern Territory. Department of Education and Training


E-Publications; PublicationNT; E-Books; Early Childhood Series




This publication was produced on behalf of the Department of Education and Training by the Menzies School of Health Research.; Robinson G, Silburn, SR, Arney F, 2011. The value of investment in the early years: Balancing costs of childhood services. Topical paper commissioned for the public consultations on the Northern Territory Early Childhood Plan. Darwin: Northern Territory Government.; Made available via the Publications (Legal Deposit) Act 2004 (NT).




Child development; Early childhood educaton; Northern Territory

Publisher name

Northern Territory Government

Place of publication



Early Childhood Series


No. 4 2011




Attribution International 4.0 (CC BY 4.0)

Copyright owner

Northern Territory Government



Parent handle


Citation address


Page content

VALUE OF INVESTMENTS IN THE EARLY YEARS: BALANCING COSTS 5 2. The benefits of early childhood programs Effective early childhood programs offer a number of different benefits: returns related to child growth and development (benefits to participating families and individuals); returns related to economic activity (benefits to individuals and to society); and returns related to adult human capital development (benefits to society). 10 As returns on investment, these benefits also include: improved school readiness and performance of children at school; reduced conduct problems and aggressive behaviour leading to reduced incidence of antisocial behaviour, delinquency and school drop-out; improved parenting and parental efficacy; improved educational attainment, employment and earnings; and reduced incidence of arrests, crime and drug use. At the level of the state, these outcomes translate into reduced costs of welfare dependence, remedial services in health and education and policing and criminal justice, together with improved workforce capability and taxation revenue. The benefits of these interventions are not confined to the educational domain, but extend to a wide range of important social outcomes. In economic analysis, the value of these benefits is calculated in terms of dollars to more accurately understand the return on investment of early childhood programs. 2.1 The return on investment in early childhood programs Over many years it has become clear that society under-invests in early childhood and child development and over-invests resources in later years. 11 In the USA where the scientific evidence regarding the critical importance of childrens early brain development has been available for well over a decade, the resources for services for children and young people and their families continue to flow to the older age groups where the capacity to benefit has reduced (Figure 3). Figure 3. Brain growth and public investment, a mismatch (Source: Children Now, 2009) 11 Public investment in the early years is supported by the science of early childhood development, which clearly demonstrates that critical developmental periods in the first years of life are strongly linked to later cognitive and social and emotional development, and thus to later educational and social achievement. The ability to influence later outcomes by targeted action in the early years clearly represents an important opportunity which is not being adequately realised. The growing consensus on the positive value of investment in the early years follows substantial economic studies of the costs and benefits of a number of high quality early childhood programs. Many of these benefits become more evident in later years as children reach adulthood. Evaluation of the long-term effects of a number of evidence-based programs in well designed randomised controlled studies and properly implemented programs have demonstrated strongly positive costbenefit ratios. 12 13

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