I previously commented in a blog post on a quotation from conservative writer Dinesh D’Souza. He expressed a frequent popular objection to early childhood programs: why should the average taxpayer want to invest in early childhood programs that might help “other people’s children”? If my child is doing alright, or I don’t have any children, what stake do I have in whether the children of other parents gain the benefits of early childhood programs?

We can reply by pointing to possible cost offsets from early childhood programs. High-quality early childhood programs will reduce special education costs. Early childhood programs will reduce crime, and thereby reduce prison and law enforcement costs.  Early childhood programs may reduce welfare costs and increase tax revenues because former participants will be better off economically as adults.  All of these cost changes provide fiscal benefits for government. These fiscal benefits will enable governments to provide some combination of improved public services and lower tax rates. The average taxpayer will benefit.

But these fiscal benefits don’t get to the heart of the issue. After all, if a lower tax rate is our main goal, we can achieve that by drastic cuts in all government programs.

The heart of the issue is how the economy works. In the long-run, we are all in this economy together. (A phrase loosely inspired by a book by Jared Bernstein.) Enhancing the skills of “other people’s children” will increase the economic prosperity of everyone. This increase in prosperity will include economic benefits for non-participants in early childhood programs.

Production in the economy is typically a team activity. My productivity will be increased if my fellow workers in that same business have higher skills. For example, a business may be better able to introduce more advanced technology or use more sophisticated approaches to production and sales if all workers in the business have higher skills.

Within a local economy, the productivity of one business may be increased by having more skills and productivity in other businesses. Businesses steal ideas and people from other businesses to boost their productivity. Businesses share suppliers, and the productivity of my business will depend on the productivity of my suppliers and whether my suppliers have sufficient other customers to stay in businesses.  This is not any special new idea of mine. These spillover effects within local economies are conventional wisdom within urban and regional economics, and are described by the jargon of “agglomeration economies”. These spillover effects help explain why great cities are able to thrive even with high costs for land and labor. (For a recent book exploring agglomeration economies, see Ed Glaeser’s Triumph of the City).

Early childhood programs are not the only way to raise the skills of a local economy. But early childhood programs increase skills by a relatively large amount per dollar of public expenditure. In doing so, early childhood programs benefit everyone, not just “other people’s children”.