Returns on educational investments are highest for early childhood interventions

Abstract

Education economics has quickly risen as a research area over the last decades, with a major focus on the “return on investment” perspective. Quality of education obviously matters for societies’ economic success and welfare-an insight that has stimulated the search for worthwhile educational investments ever since. In modern societies, education is mainly financed by the public sector, and it has turned out to be a bottomless pit. There are almost endless opportunities to invest the limited resources available. Just to mention a few examples: Should extra money go into gifted or special education? Should one buy computers for the students or hire additional teachers? Should teachers’ salaries be raised in order to attract more competent applicants? These are all legitimate questions and in most cases there are pros and cons for each possibility, which does not make decisions any easier.