Engineering is inseparable from economics. Doing engineering without regard for costs or return on investment (ROI) is doomed to failure. So here's a question to ponder: what investment can produce a return over time of $60.04 for every dollar invested? Is it something like Tesla, or SpaceX, or a particular stock?
Not according to Ray Perryman, a consulting economist who runs the Perryman Group and writes a newspaper column. The investment he has identified that returns sixty-for-one is surprising in its nature and simplicity.
It's early childhood education, conventionally defined as any formal education that takes place from birth up to the third grade in elementary school.
The returns break down roughly as follows. Every dollar invested in early childhood education returns about $15 in future earnings of the child educated. It returns almost as much ($14) in parental earnings, presumably because the parents benefit from having a better-educated child. Improved earnings from future generations amount to $6. The largest single return is reduced social costs from decreased need for crimefighting and social services: $21. And because the child will be healthier and live longer, those effects are quantified at about $2.50.
Economists are not used to treating people as anything other than utility-maximizing consumers. But as both popular writer John C. Médaille and academic John D. Mueller have pointed out, modern economics subscribes to what Mueller calls the "stork theory" of human development. In the economists' mathematical models, people simply appear fully grown and ready to consume. The effort of parents in raising children, all educational work, and the process of procreation itself is simply regarded as consumption, the same as if it were all blown on trips to Aruba. Critically, modern economics ignores everything in the nature of gift: the giving of parents to children, the giving of charity to the needy, and so on.
Fortunately, some economists are beginning to remedy these glaring omissions in the way economics models the human world. And Perryman's analysis of the profound effects of early childhood education is a good step in this direction.
Engineering education is as blind as modern economics in this regard. We set up engineering schools and just assume that somehow, qualified students will show up and be ready to learn how to be engineers. And so far, it's worked. But declining birthrates worldwide and massive educational disruptions such as COVID caused may show up as a severe shortage of qualified students, which is already causing problems for some institutes of higher education.
In his book Redeeming Economics, Mueller shows how these blind spots in modern economics have caused profound distortions in the way economic predictions and advice turn out. Perryman's calculation of the stupendous ROI of early childhood education shows that, systemically speaking, we should be pouring more money into Head-Start-like programs, preschools, and grades 1 through 3 than we spend on highways, the Internet, or AI. But especially in the U. S., education is an unglamorous and often politically contentious field which enjoys little in the way of prestige or a united opinion as to what should be done. This is one aspect of the larger anti-child tone of current culture, but that's a discussion for another day.
While money can help improve early childhood education, what helps most of all is interested and engaged parents. And here we go way beyond economics, at least the modern kind. I was once invited to sit in on a focus-group panel convened by some STEM (science-technology-engineering-math) educators who had recently received a National Science Foundation grant to improve engineering education. The details of what they were trying to do have faded from my memory. But at one point, the panel leaders asked us members what we thought were important factors in making students ready for engineering education.
I said that a stable family environment of two biological different-sex parents was one of the most important factors in favor of fostering children who could grow up to be engineers. What I won't forget was the expressions of strained indifference that met my statement. Family structure and stability were clearly beyond NSF's scope. And this is not to say that children from broken homes or abusive parents can't make it as engineers. They can, but it's harder.
Back in the Early Pleistocene when I was a child, my mother, an intelligent woman educated as a teacher who went on to get her master's degree, looked upon me as a kind of project, and challenged both me and herself to see how much I could learn about the alphabet and reading before I entered first grade. I was too young to appreciate it at the time, but she blessed me (an act of giving) with what Perryman would value at many dollars of equivalent early childhood education. And that blessing enabled me to go on to have a moderately successful career first in industry, and then in academia.
She put aside her teaching career to raise her children until her youngest was in school, and then went back to teaching. But the dollars she deferred while she was raising us paid off handsomely, as Perryman's analysis indicates.
If it ever happens, it will probably take a generation before economists as a group learn how to quantify giving as well as consuming. But if they do, we will get a vastly different picture of the economy than what we see now, which is focused on stuff and organizations, and neglects the vast amount of giving among people that is fundamentally vital to any economy that isn't going to die out in one generation. My metaphorical hat is off to Ray Perryman and his colleagues, who have made one small step in a much-needed direction of acknowledging that investment in people is not only morally right—it pays much better than almost any other kind.
Sources: Ray Perryman's column "The Economist: Essential Early Education" appeared in the Jan. 2, 2026 edition of the San Marcos Daily Record. The study on which the column was based can be found at https://www.perrymangroup.com/media/uploads/brief/perryman-essential-early-education-12-09-25.pdf. For more on the blind spots of modern economics, see John C. Médaille's Toward a Truly Free Market (ISI Books, 2010) and John D. Mueller's Redeeming Economics (ISI Books, 2010).
No comments:
Post a Comment