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Improving Early Childhood Development

Financing Services


Dr. Lynn Karoly, Director of the Labor and Population Program, RAND.

States and other program funders want to know that early childhood intervention programs yield positive outcomes and are worth the investment of funds and resources. Cost and outcome analyses have, indeed, demonstrated the benefits of early intervention as well as possible cost savings, according to Dr. Karoly.

Benefits of a particular approach or program may accrue in several domains for both children and parents, among them, improvements in the areas of:

  • Emotional and cognitive development.
  • Education.
  • Health and welfare.
  • Income.
  • Crime.

Further, the benefits may have positive spillovers over the long term, such as increased tax revenue from increased employment and reductions in special services, welfare payments, and criminal justice system costs. One of the challenges, however, is that costs accrue as children participate in the program and benefits accrue as they develop and into adulthood.

Financing of early childhood development services is not limited to a single sector. The multiple factors affecting early child development and the broad impact of positive outcomes justifies investments by health, education, child care, welfare, and mental health.

States can look to several sources of funding to support initiatives and services to improve early childhood development. Although admittedly difficult to achieve collaborative approaches and seamless integration of services, State agencies can strengthen the delivery, coordination, and cost effectiveness of early child development services by maximizing Federal and State funding sources and partnering with each other.

Federal programs and funds that can support early childhood development services include:

  • Title XIX (Medicaid).
  • SCHIP (State Children's Health Insurance Program).
  • TANF (Temporary Assistance to Needy Families).
  • Head Start and Early Head Start.
  • Part C of IDEA (Individuals with Disabilities Act).
  • Child Care and Development Block Grant.
  • Title V (Maternal and Child Health).
  • Mental Health Services Block Grant.
  • Child Welfare Services (Title IV-B).
  • Elementary and Secondary Education Act (Title I).

Additional Resources

Academy of Pediatrics. Periodic survey of fellows #46. 2001.

The Foundation for Accountability (FACCT). Promoting health development survey (PHDS). Portland (OR), 2001.

National Center for Health Statistics, Centers for Disease Control and Prevention. National Survey of Early Childhood Health. Washington (DC): 2000.

Current as of July 2002

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Internet Citation:

Improving Early Childhood Development: Promising Strategies for States and the Health Care System. User Liaison Program Workshop Brief, January 30-February 1, 2002. Agency for Healthcare Research and Quality, Rockville, MD.

The information on this page is archived and provided for reference purposes only.

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