“You can’t be pro-business unless you’re pro-education”

San Antonio Mayor Julian Castro, in his keynote address on September 4th to the Democratic National Convention, made the following notable statement: “You can’t be pro-business unless you’re pro-education”.

In the context in which he made that statement, Mayor Castro’s statement expresses a profound and important truth. However, such a statement can be misleading if exaggerated.

Mayor Castro went on to talk about the need for “smart investment” in “a workforce that can fill and create the jobs of tomorrow”. Among the smart investments he referred to is ensuring “that more four-year-olds have access to pre-K”.

In this context, investing in high-quality pre-K education is among the most cost-effective ways that state and local political leaders can promote long-run economic development of their local economies, which means boosting the per capita income of local residents. That is the main point of this blog, and of my book Investing in Kids.  These programs have large enough effects on adult skills, and enough former participants will stick around the local economy, that large-scale expanded pre-K can significantly raise the human capital of a local workforce. And numerous studies have shown that increased local human capital will increase the quantity and quality of local jobs. For each dollar invested in high-quality pre-K, simulations suggest that the present value of local residents’ per capita earnings increases by around $3.

So, if you’re pro-business, you should be highly supportive in smart investments in effective educational improvement programs such as high-quality pre-K.

However, this doesn’t mean that each and every proposal for increased educational spending will qualify as a “smart investment” that effectively promotes local and national economic development.  Nor does it mean that each and every proposed educational reform that claims to increase teacher quality or school quality is a pro-business reform.

What we need to focus on are educational improvements that have good evidence of success, and that can feasibly be implemented on a large scale. Demonstrated high returns and the potential for large scale implementation are the keys to proposed educational investment having the potential to really affect the long-run growth of business investment and good jobs.  In this category are large scale investments in high-quality early childhood education programs.

About timbartik

Tim Bartik is a senior economist at the Upjohn Institute for Employment Research, a non-profit and non-partisan research organization in Kalamazoo, Michigan. His research specializes in state and local economic development policies and local labor markets.
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