Public Investment in Children’s Early and Elementary Years

Julia B. Isaacs,
Julia B. Isaacs Former Brookings Expert, Senior Fellow - Urban Institute
Adam Kent, Jennifer Macomber, and
Jennifer Macomber The Urban Institute
Tracy Vericker
Tracy Vericker Urban Institute

April 15, 2010

Introduction and Key Findings

How government spends money, and who benefits, reveals our priorities. How, then, do children fare in the competition for public resources? While families have long been the primary caregivers of children, all levels of government – local, state, and federal – invest in the growth and development of children, whether through education, family supports, or health and nutrition benefits. Knowing how that money is spent, and whether it is being put to good use, is crucial for creating effective public policy.

To track government’s investment in children, the Urban Institute and the Brookings Institution have documented historical, current, and projected levels of federal expenditures across more than 100 programs serving children (Isaacs et al. 2009; Carasso et al. 2008).  More recently, we have looked in-depth to highlight federal investment by age group. Analyses by age allow us to evaluate spending in light of what we know about child development and about policy priorities. They also reveal which federal programs and categories dominate spending for each age group. Federal officials and the interested public may not know which programs spend more or less on different groups of children. As part of these reports, we also integrate estimates of state and local spending from a report by researchers at the Rockefeller Institute (Billen et al. 2007).

Our goal is to identify patterns of public investment in children by levels of government and across age groups. We cannot answer what amount of spending would be best for the country. We do, however, offer some context based on child development research. In doing so, this brief provides an overarching view of investments in children and illuminates critical decision points and questions for policymakers.

In this brief, we look at public investments across age groups, from birth through the elementary years. Key findings include the following:

  • Total public investment grows substantially as children get older. Spending more than doubles per capita between the infant and toddler years and the elementary years. The increase is driven by growing state and local spending; the federal contribution is relatively stable across age groups. Research on children, however, finds significant value in investing in kids at the earliest ages, helping them build a foundation for growth and development.
  • States and localities spend more money than the federal government does on children, except when it comes to the youngest children. The federal government is the junior partner in public investments for children overall. For the youngest children, however, more than three quarters of spending comes from the federal government. This pattern suggests that the fiscal health and priority choices of all levels of government matter when it comes to investment in children.
  • Key developmental needs, such as education and health care, are addressed to some extent by the federal government for each age group. Across age groups, the largest federal investment is in tax credits and other tax expenditures. On the spending side, the largest federal investments vary by age group, but some of the key players across age groups are Medicaid, food and nutrition programs, and Temporary Assistance to Needy Families (TANF). Only one education and social service program (the Child Care and Development Block Grant) breaks the top 10 largest federal programs for infants and toddlers, despite research showing how important early care and education are for this age group.
  • Federal expenditures for children become less targeted or means tested (that is, based on income), as children get older.

Methods for our analysis are described later in this report and in greater detail in our specific age-group reports (Kent et al. 2010; Macomber et al. 2009; Vericker et al. 2010). A few points are worth noting, however. Estimates of total public expenditure and those comparing federal with state and local expenditures are only for 2004 and do not include tax expenditures, due to limitations in available state data. For the more in-depth look at spending on federal programs alone, we provide 2008 data and are able to include tax expenditures.

For related research on expenditures for all children see also Kids’ Share: An Analysis of Federal Expenditures through 2008.