Economic Analysis

Investing in early childhood education doubles the return to Australia

The Front Project commissioned the first comprehensive Australian analysis of the economic impact of early childhood education.

The model looked at the impact of the current Australian system, which provides an early education program for 15 hours a week, delivered by a Bachelor qualified teacher, in the year before school.

Our current system offers a significant return on investment (ROI) of 1:2. For every dollar invested now, Australia receives $2 back over a child’s life.

Children, families, governments and business all benefit from the returns early education provides. Benefits are reflected in higher earnings and workforce participation, increased tax revenue and considerable savings in health, education and justice budgets. Early education plays a key role in Australia’s prosperity.

The findings demonstrate the potential for more children and families to live healthier, happier and more productive lives alongside dividends that will benefit our entire society and economy.

The ROI can be attributed to the skills and abilities children develop in early education. These abilities lead to stronger academic performance through school and a greater likelihood of school completion and undertaking further education. School completion and participation in further education are key predictors for higher future incomes and better wellbeing.

Increasing the benefits

We have an opportunity to increase the benefits of early childhood education and improve outcomes for Australian children and families by:

Investing in quality
Every child should have access to a quality early childhood program that enhances their learning and development. Currently a quarter of services aren’t meeting the National Quality Standard.
Committing to ongoing funding
Ongoing funding commitments from State and Federal Governments will lead to improved service viability, planning, job security and quality. The current agreement between the Commonwealth and the states and territories to fund these programs will expire at the end of 2019. It has been renewed annually or biannually for the past 7 years.
Increasing access
Ensuring children in disadvantaged communities have access to quality early childhood education. They have the most to gain yet are the least likely to attend and the least likely to experience high quality learning.
Offering two years
Two years of quality early childhood education in the years before school has a bigger impact than one year. Australia is one of the few OECD countries not offering two years of preschool, putting us at risk of falling further behind on international benchmark tests, like PISA.