Some skeptics about early childhood programs accept that these programs may be effective in increasing the future earnings of participants. But, a skeptic could say, even if former participants stay in the local economy, how does this benefit others in the local economy?
Skeptics with this view have an implicit model of the local economy. This implicit model has a fixed number of good jobs. Adding more high-quality labor simply adds more competition for the fixed good jobs, which may even be bad for already more-educated local residents.
But this is an incorrect model of how local economies work. Greater local availability of skilled workers helps all local workers. My productivity and hence my wage will go up if there are more skilled workers at my employer, which allows my employer to better introduce new technologies. A business’s productivity may go up due to stealing skilled workers and ideas from other local businesses. A business may be more competitive if its local suppliers have more skilled workers. These statements are backed up by urban economics research by Glaeser and Moretti.
As a result, having more skilled workers in a local economy helps workers at all skill levels in the local economy be more productive. Because of this greater local productivity and competitiveness, local economies with more skills will attract more job growth and in particular attract more good jobs.
Why should I be willing to pay higher taxes to invest in other people’s children? Because doing so helps a wide variety of groups in the local economy, not just former participants in these programs. There are large spillover benefits to greater participation in high-quality early childhood programs.