Public investments in education are less certain to pan out. The funds may get squandered on bureaucracies. The teaching and learning may be ineffective. The funds may not influence people's educational choices much. For example, the recent tax credits for college education seem most likely to go to parents who would have sent their children to college anyway.
Evidence suggests that the highest rates of return come from investing in early childhood education.
Well-structured programs targeted toward preschool children have produced large improvements in their later educational and labor market success, with estimated rates of return that would make a venture capitalist envious. Yet we are spending a tiny fraction of total federal resources on children under the age of 5, a commitment that is likely to wane further given the tight budget caps on discretionary spending for the foreseeable future. Unlike other countries such as France and Italy, we do not routinely subsidize the education and care of young children. Child-care debates in this country have focused on the benefits for working mothers but should be redirected to examine how more educationally oriented programs could help children and the nation's future productivity. The opportunity ought to be extended to less advantaged children as well.