Invest in kids: It pays off
The returns are higher than investing in adults and will reduce SA’s yawning inequality gap
The World Bank has once again ranked South Africa as the most unequal country in the world. Its report, Poverty and Shared Prosperity 2016: Taking on Inequality, which it released this week, ranked South Africa at the top of 101 countries sampled globally.
The World Bank urges the country to develop labour policies that facilitate the creation of specialist skills in fields such as science and engineering, but adds that these measures yield mixed success in the short to medium term and often depend on a favourable economic context.
Success in boosting manufacturing output and exports, for instance, is largely affected by international trade policies and currency movements, and widening safety nets for the poor involves increasing taxes.
The report says one long-term solution that is increasingly gathering support from economists is additional investment in the first four years of childhood development among low-income families.
Analyses of Latin American countries such as Chile, Colombia and Ecuador have found large cognitive differences between children in the poorest and richest families. These changes often remain largely unchanged after the age of six.
Children from poor backgrounds thus start off from a lower baseline than their counterparts from wealthy families. This ingrains intergenerational income disparities with attendant social costs and a bill to be footed by taxpayers.
Investing more resources for the poorest children in the first four years of their lives is a low-cost solution that yields a higher rate of return for each dollar invested than interventions directed at older children and adults.
South Africa’s treasury used funds earmarked for early childhood development to make up the shortfall at universities following the government agreeing to no student fee increases in 2016.
In 1962, American preschool educationist David Weikart sought a solution to improving school performance in poor pupils.
He formed a small research team that later developed the HighScope Perry Preschool Study that analysed the lives of 123 children born in poverty over a period of 40 years.
At ages three and four, the subjects were randomly divided into two groups, with one group receiving quality preschool instruction and the other receiving no instruction.
By the age of 40, adults in the preschool group had higher earnings, were more likely to be employed, had graduated from high school and were less likely to have been arrested, spent time in jail, or used drugs than the other group.
Statistics South Africa indicates more than half of the country’s 5.3-million children below the age of four live with a single parent, 2.4-million children live with single mothers and 1.4-million live in households with no employed family member.
This disparity progresses into primary school, as illustrated by a World Bank analysis of maths scores of the top richest and bottom poorest primary school pupils in the country.
Between 2007 and 2011, children from the poorest families scored an average of 40% in maths and those from the richest scored 90%.
Haroon Bhorat, professor of economics and director of the Development Policy Research Unit at the University of Cape Town, states that developing South Africa’s human capital in the mould of the Asian Tigers countries (Hong Kong, Singapore, South Korea and Taiwan) is vital.
“Unfortunately, South Africa’s educational system currently struggles to create the human capital foundation required for growth,” he states in a paper published by the Brookings Institute.
Among developing countries, including China, India, Indonesia, Brazil and Malaysia, South Africa is ranked poorest in maths and science scores — between 26 and 28 percentage points lower than the global average.
“Robust statistical analysis finds that the current South African educational system as a whole has either a weak or nonexistent relationship with long-term economic growth,” says Bhorat.
South Africa already implements a social safety programme targeted at children from poor families through the department of social development’s child support grant.
But a recent evaluation by the department and the United Nations Children’s Fund (Unicef) of the child support grant found that 43% of children under the age of one were excluded from receiving it.
The study also found that the effectiveness of the child grant is diluted because poor families use the money to pay for other expenses.
The department of basic education’s National Curriculum Framework aims to provide children under the age of four with the ability to develop critical and creative think- ing, information analysis and effective communication.
The policy encourages adults to promote the development of children through challenging activities as well as play.
The Unicef report suggests that direct payments of the child support grant be to women, on the back of analyses that suggest that women spent money meant for infant healthcare and education more prudently than men.
Like most policy interventions, success lies in its implementation to afford new-born South Africans an equal staring point.