If a 3-year-old's teacher adds $320,000 to the future income of that child's class, should we pay a bit more to keep that teacher in a job? Or would you rather have a tax cut now?

My journalist-trained colleagues on Pundit probably will wince at my opening with such a hackneyed cliche, but everything changes when you have children of your own.

In particular, issues that previously caused your eyes to glaze over with boredom suddenly come to seem of vital importance. Immunization regimes. Car safety standards. Teaching methods and modes of assessment. And so on.

Frankly, I think this is one of the reasons for the "those with children/those without children" split that seems to develop once the members of a previously close social group begin reproducing. Those who have kids suddenly find a whole lot of new, interesting things they desperately want to talk about. Those without just couldn't care less. Conversations suddenly become a lot more difficult to maintain.

All of which is by way of explaining why I'm posting on the topic of early childhood education, something that I wouldn't have thought twice about a couple of years ago. A quick backgrounder.

The previous Labour Government adopted a couple of policies that radically transformed the sector. First, it introduced the "20 Hours Free" policy, which provided universal, government-funded education for 3 and 4 year olds. Second, it gave higher subsidies to early childhood education centers employing staff with teaching qualifications.

The idea was to ensure that every child had the opportunity to receive some level of early childhood education, whilst encouraging centers to recruit and employ staff who had been taught how to teach young children.

Now, these policies weren't perfect, and created challenges that any government elected at 2008 was going to have to confront. (There's a good academic discussion of the policy's background and future challenges here.) Which is where National's 2010 budget comes in.

Before the election, National had essentially promised to not only retain Labour's 20 Hours Free policy, but to expand it in some areas. You might see this as a part of its broader tactic of reassuring "middle New Zealand" voters that a change from Labour would not represent a major realignment on issues of social policy (hence the retention of interest free student loans, Working for Families, and the like).

But having committed to keeping 20 Hours Free, National also faced the problem that it wanted to find savings in social spending to help fund its flagship tax cuts. So it looked to the second of Labour's policies, and decided to cap the higher subsidy payments so that they apply only up to 80% of a center's teaching staff. If a center has more than 80% of its staff with qualifications (and hence receiving higher wages), then the center will have to either fire them or fund them from other sources ... such as fees from parents.

Bill English was quite open about the reasons for this move:

There has been very significant spending in early childhood, that's been a big benefit to families and we want to make changes that will mean we can maintain that significant level of support, there's a risk that is we just let spending run away that down the track there'd be more drastic decisions have to be made.

In other words, if the Government kept funding qualified teachers at a higher level, and more early childhood centers become fully staffed by qualified teachers, then it would cost lots and lots of money.

That is undeniably true. But it raises the question: is spending money on the care of young children best seen as a subsidy of babysitting costs that permits parents time to do other things, or a long-term investment in the education of future generations?

I suspect that the former view underpins the Government's decision. It's certainly one that has a foothold in society at large - witness this New Zealand Herald editorial on the issue. And if this is the view you hold, then it is manifestly silly to spend more money on such caregivers just because they hold a piece of paper saying they know how to teach.

But I wonder if this isn't one of those issues where your views will be skewed by whether you currently have young kids. Certainly, this (admittedly Australian) survey indicates that parents do care about whether their child's carer holds a teaching qualification (amongst other factors, of course ... no parent wants Charles Manson or Cruella De Ville to look after their children, irrespective of his or her academic qualifications for the job!)

And there would seem to be good reason for wanting your child's carer to offer more than being a happy person who sings nursery rhymes to them. This NY Times article - published, interestingly, in the paper's Business section - covers a US study tracking the effect that kindergarten teachers have on the future earnings of their students. It's conclusion?

[The researchers] estimate that a standout kindergarten teacher is worth about $320,000 a year. That’s the present value of the additional money that a full class of students can expect to earn over their careers. This estimate doesn’t take into account social gains, like better health and less crime.

(The study's powerpoint slides are here, for those interested in looking at it further.)

Now, of course there's no guarantee that a given early childhood educator with an academic qualification will necessarily be a better teacher than a given educator without one. But it seems to me that overall, in the main, across the board, that will be the case. Or, at least, if that isn't the case, then our entire system of teacher training for all age groups probably can get chucked out the window.

Which then brings us to the crux of the problem with the Government's move. Early childhood education centers with fully qualified staff cost more to operate, and following the Government's decision they will charge higher fees. (My daughter's center, for instance, is signaling that it'll have to charge over $40 a week more for kids under 2.)

I've no doubt that a lot of parents will find the money to pay those fees - goodbye to my upcoming tax cut, though! However, a number of parents won't be able to - or will choose not to - find the extra money. Which will mean their children will in many cases, overall, across the board receive a lower quality of education (and hence suffer lower incomes as adults).

So, the question arises. Even if Bill English is saving money through his cuts, in doing so is he stealing from the futures of those whose parents cannot (or will not) afford to pay the difference?

Comments (13)

by Mr Magoo on July 30, 2010
Mr Magoo

Very good points and a great post. I have children of course so I do care.

The (currently) childless masses SHOULD want our kids to grow up to become productive.

Well educated and  internationally competitive children will grow up to fund our super and health care! (assuming it is still public by then)

by stuart munro on July 31, 2010
stuart munro

One of the constant conflicts between state and private provision of care is whether commercial or institutional providers really can replace a concerned parent as a first teacher.

The persuasive studies of the likes of Malcolm Gladwell attribute at least half of the successes of his outliers to family cultures or competencies acquired through them.

It would be nice if one could create, on demand, the standout teachers depicted in the likes of Lemov's Taxonomy, but there is no guarantee of it.

At least part of the argument against government funded childcare is that benefits will accrue chiefly to the middle class.

Which, one imagines is why Labour slipped this poison pill into National's expenses - so that the middle classes will punish them for removing it.

Neither party's position seems especially well thought out or consistent with the long term best interests of the country as a whole.

by Andrew Geddis on July 31, 2010
Andrew Geddis

Stuart: "At least part of the argument against government funded childcare is that benefits will accrue chiefly to the middle class."

That may be an argument that is made, but is it true? I/S over at No Right Turn quotes The Spirit Level as saying that:

"Early childhood education programmes can foster physical and cognitive development. They can alter the long-term trajectories of children's lives, and cost-benefit analyses show that they are high-yield investments. In experiments, disadvantaged children who have received high-quality early childhood education are less likely to need remedial education, less likely to become involved in crime, and they earn more as adults. All of this adds up to a substantial return on government investment in such programmes."

So even if it is shown that proportionately more middle class families use early childhood education services with trained teaching staff (which is a claim that would need some proof - anyone know if it is there?), doesn't it matter that those below-middle-class families that do so will actually get more of a boost from it?

by stuart munro on July 30, 2010
stuart munro

I think there are a few too many what-ifs in that chain of reasoning to be entirely comfortable - but a major attraction of teaching in Asia is the serious focus on education.

I suspect the target learning values might come as readily from a charter approach - & remain skeptical of govt funded private anything. While parties contest the issue, we can expect no strong social consensus - and it is the strong social consensus that imho makes such strategies effective.

Broadly speaking though, the failures of NZ over the last 30 years do not appear to spring from overinvestment in human resources. Much more could be done, but like Keynesian economics, societal investment in education requires assiduous and scrupulous management if it is to succeed.

So National have to scrap it - scruples are outside their skill set.

by Claire Browning on July 31, 2010
Claire Browning

If a 3-year-old's teacher could add $320,000 to that child's future income, should we pay a bit more to keep that teacher in a job?

It would be a no-brainer, wouldn't it? Except, as I understand the US study (based on the quoted bit), that's not what it says that it found at all. The annual $320k worth was the present value of additional money that "that a full class of students can expect to earn over their careers". (Or, does it work out, roughly enough, the same? or maybe even more? if you accumulate the annual worth, over whatever number of years and divide it by class numbers? Being childless, didn't bother to do this.)

Well done, getting me to read it, though -- and I do have another question.

Aren't you (among others in the debate), presenting a bit of a false choice, between 3-4 year olds either being educated under Labour policy, or not under National policy? When in fact, surely, the 80% subsidy cap doesn't rule out the employment of teacher-trained early childhood carers at all. The centre just may not be able to afford a full staff of trained educators, but it can presumably still afford to employ some -- and if "some" is 80%, how much damage does a 20% loss (in the event that parents can't afford to supplement) really do to the kids' education and future earning prospects?

It's kind of an in-theory type question -- it doesn't address the practical implications for centres already 100% staffed (having to make redundant or top-up), and I'm not attempting to comment on whether National might have gone back on a pre-election promise, or whether tax cuts were a good alternative use of the funding.

by stuart munro on August 01, 2010
stuart munro

The thing is - if the rationale is valid, that is, that childcare centres are indeed significant education providers not merely a parental respite - then fully funded provision of them to all levels of society ought to be a priority for any government. It would be a sound investment - and incidentally a valid form of job creation in the currently depressed environment.

 But if the rationale is not sound,then it should not be funded at all. The government is trying to have a bob each way. Mind, so did the last lot - not that prior stupidity excuses current stupidity.

by Claire Browning on August 01, 2010
Claire Browning

Even if the rationale is valid, government doesn't, any longer, fully fund any other education provider: everywhere else in the sector, there's some expectation of a parental or student top-up, by way of fees. I'm not, myself, sure why early childhood should be any different; but as I pointed out above, perhaps I'm not sufficiently invested in the argument! And before you come back, Stuart, and grumble at me that free education throughout should be a priority investment for any government, by all means explain, as well, how you figure they should pay for it.

by Paul Corrigan on August 01, 2010
Paul Corrigan

I'm inclined to ask: how did we all get on before it was decided that trained teachers would be better for our small children's development than mothers and fathers?  You know, how it used to be done.

I've been following some of the debate about this now that my two young grandchildren go to day care. Why can't there be a mixture of teachers --  trained and formally untrained people -- at a child care place? It seems to me that the emphasis on formal qualifications  excludes women (and men) with a natural affinity for children but who don't have the required pieces of  paper. Would fewer qualified teachers make that much difference?

Parents have been around and doing the job and raising children who became geniuses (or otherwise), rich and famous (ditto), simply diabolical (ditto) and so on for a bit longer than qualified early childhood carers.


by stuart munro on August 01, 2010
stuart munro

Claire, we are discussing the supposed future effects of qualified childcare, and Andrew's complaint that National restricts it.

Now, if benefits can be reliably produced in the form of long term earning power, as Andrew suggested, then it would make sense for the government to borrow to fund it.(given current low interest rates)

If, on the other hand, the benefits are not demonstrable, perhaps government should not be subsidising these lifestyle choices at all.

If we were discussing education in Scandinavia, however, I suspect that proving the benefits, and implemeting and funding the service would not be problematic.

That governments no longer fully fund any other education provider is their enduring disgrace, not mine.

by Andrew Geddis on August 02, 2010
Andrew Geddis


Yes - my teaser did misstate the study's findings ... $320,000 is the present value worth of the Kindergarten teacher per class, not the expected value that teacher adds to each student's future income. My apologies for misleading. [Update: actually, I've edited it a bit ... it's still not completely correct (doesn't take into account the difference between the present value and future value of money), but at least it is less misleading ...]

On the question of 80% vs 100% ... my understanding is that this is problematic in two ways. First (as you acknowledge) it messes with centers that did what the last Government promoted and moved to fully (or virtually fully) trained staff - they are now are in a funding hole. Second, the whole concept of having qualified ECE staff to do the "teaching bit" of the child's day and non-qualified ECE staff who do the "non-teaching" bit doesn't really work with young children. The whole point is to build up a bond between individual carers and a child, out of which education (in the sense of the child developing their learning, social and physical skills with the encouragement and help of the carer) flows. So it isn't like school, where you have "class time" and "play time". With 80% qualified staff, you thus end up with either 1-in-5 children getting a non-qualified carer as their educator, or a rota system of carers which messes with the bonding process. Neither outcome is optimal. (Of course, I acknowledge that some "non-qualified" carers actually will do a perfectly good jo b - better than many qualified carers ... but again, you make national policies on the overall, most-of-the-time, in the general case outcome, not on the individual one.)

As for "but everyone else pays something for education" ... true. And true already in the ECE field (we already pay $200-odd a month). But the Government's move will lead to having to pay more for a certain kind of ECE - the high quality, fully qualified, low staff-child ratio type. Which is the best type, leading to the best long-term outcomes for kids (there's lots of research on this). So it'll become increasingly the preserve of those who can afford it - who are the kids of relatively well-off families who already do better in the schooling system.

As for how to pay for it? I thought that was explicit in my post. More state support of ECE requires more tax. Why should you - without children - have to pay this? Well, it's the price of a society that provides equal opportunities to all its future citizens ... who in turn will become the productive workers of the future who will fund your retirement. So you can either have a bit more spending money now, or invest in the future of your country. That's a judgment call that has to be made by each and everyone of us.


"Parents have been around and doing the job and raising children who became geniuses (or otherwise), rich and famous (ditto), simply diabolical (ditto) and so on for a bit longer than qualified early childhood carers."

That is true. But the way humans have raised children has not been a static thing - compare the traditional kinship structures of Maori with the nuclear family arrangements that the growth of capitalism/urbanisation has fostered. The idea that Mum (and it's mainly Mum) stays home to look after the kids while Dad goes off to earn a living is comparatively recent, and has been subject to some pretty withering critiques by second-wave feminism. So given that nowadays Mums and Dads alike seek to have lives beyond just being childrearers, and there no longer are the extended family/whanau networks available to look after the children, there needs to be some sort of social alternative structures created.

Also - this study regarding the effect of Mothers going back to work after childbirth might be of interest.

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by danniel on July 10, 2012

You have some interesting points. Early education is as important as the higher education at any level so yes, I think that teacher compensation should be a very important issue. Some people should owe their degrees to their teacheras because some teachers can really have an impact on our whole lives.

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