Workforce: Human Capital - Adding value to the early years

The Office for National Statistics (ONS) is looking to broaden its understanding of human capital. So what is it, and why should those working in the early years sector care?

What is human capital?

‘Human capital’ is the knowledge, skills and other attributes possessed by individuals that are relevant to the economy. People’s collective knowledge and skills represent a country’s stock of human capital. The more knowledge and skills a society has, the greater the potential for economic returns.

Human capital operates at the individual level: obtain more knowledge and skills and your personal economic competitiveness will improve. Or in the words of many school careers officers, work hard at school, get good grades and you will go on and get a good job.

This is currently measured solely in monetary terms – as the lifetime earnings of the working-age population. The new consultation wants to broaden the approach to potentially take account of new indicators such as time spent playing, whether a person attended pre-school, was taken to cultural events, the number of teacher vacancies, experience of trauma and maternal health.

Human capital in the early years

In the past 20 years or so, human capital has become central to global debates on the value of early years services. The early years have been identified as providing the foundations to children’s lifelong learning: the notion of getting it ‘right’ in the early years to help make later learning easier, thus ensuring that individuals will become well-educated, contributing to both their individual human capital and that of society.

The role of early years services in contributing to a country’s human capital has been used as a persuasive economic argument internationally to help secure greater levels of investment into early years services. At one point the World Bank had a calculator to enable governments to calculate the profits to be made per 1,000 children if they invested in early years services (Penn 2012, Campbell-Barr and Nygård 2014).

The core of the economic arguments rests on the premise of invest now, save later, drawing on international evidence that has become something of a folklore, whereby for every dollar invested, seven can be saved on the child entering adulthood (Campbell-Barr 2012). The total amount to be saved through investing in the early years varies depending on the individual study being looked at, and often the studies being referred to have been undertaken in America, targeted at specific populations and often have small sample sizes (Campbell-Barr 2012). Therefore, their relevance for an international argument of ‘invest now, save later’ is somewhat questionable.

Recognising the value of early years services is not in itself problematic – I do believe that early years services play an important role in supporting the holistic development of children. However, how human capital is interpreted has consequences for understanding early years services and the expectations of the children and professionals within them. It is these interpretations that make ONS’s consultation on human capital pertinent to the early years community.

Consequences for early years services

The danger of any human capital approach is that both quality and children’s development become reduced to the features of early years services and children’s outcomes that can be observed and assessed, with a monetary value assigned. This inevitably raises questions as to what can be observed and assessed most easily and there is a risk that many features of early years practice and children’s outcomes are lost. How would you measure children’s well-being, for example – what does this look like and how much do we, as a society, choose to value it for?

The consequences of such a reductionist approach confine early years professionals to technocratic approaches to practice. Working with children becomes a set of prescriptive approaches to be applied at the right times in order to achieve the desired outcomes. For example, if ‘good’ human capital is X, then early years services will be expected to work towards X to secure children’s future economic competitiveness. There is an implied universality here – a mythical normal child that is to be uniformly achieved.

There is also an assumption that child development is only valued when an economic value can be derived from it. This results in a strange game of predicting the future, whereby we try to guess what knowledge and skills will achieve the best value for children entering adulthood – but what do we really understand about what knowledge and skills we will need in 2030 and beyond?

There is also a message that children are valued only on their entering adulthood. Instead of being valued as an important stage in its own right, childhood is merely a path to becoming an economically active adult. The devaluing of childhood, and ultimately early years services, is evident in an education model where debates on school readiness abound.

There is a naivety to models of human capital, whereby an assumption has been made that the true cost of providing early years services has been identified. An easy formula for considering the economic input into providing early years services would be to look at the rate of funding that is provided. This would potentially limit assessments of value to children from the age of two, when early years funding first becomes available.

However, it also rests on the assumption that the funding provided is sufficient to cover the costs of providing quality early years services. The unpaid hours for completing paperwork, the few extras thrown into the trolley at the supermarket and the annual fundraiser would not be captured. Nor would the careful juggling of different income streams in order to make the books balance.

Despite these attempts to improve the definition, the central idea of measuring human capital within the early years misses the point of what it is that early years services contribute to society – or the realities of being a child within those services. If there is hope within the human capital model, it is that unpicking what is embedded in the term offers the opportunity to open up a discussion of the rich ways in which early years services contribute to the holistic development of children.

The consultation is available here: https://bit.ly/2VQ7RTp

References

Campbell-Barr V (2012) ‘Early years education and the value for money folklore’, European Early Childhood Education Research Journal, 20(3)

Campbell-Barr V and Nygård M (2014) ‘Losing Sight of the Child? Human Capital Theory and its Role for Early Childhood Education and Care Policies in Finland and England since the Mid-1990s’, Contemporary Issues in Early Childhood, 15(4)

Penn H (2012) ‘Shaping the future: how human capital arguments about investment in early childhood are being (mis)used in poor countries’ in Yelland N (ed) Contemporary Perspective on Early Childhood Education. Open University Press