Early Education: How cash transfers can send more kids to school

This is the first article of a two-part series on Education Priorities for Andhra Pradesh
Early childhood programs have long been shown to create improvements that last a lifetime. Whether by instilling good habits or by encouraging a passion for learning, early exposure to learning cuts drop-out rates in later schooling, and generates measurable improvements to the productivity and income of adults.
The Integrated Child Development Scheme (ICDS), initiated in 1975 on a pilot basis, has now grown to include 1.3 million Anganwadi centres across the country – one of the largest initiatives of its kind in the world for children under the age of six.  But the big challenge for India is to expand pre-school education access to even more children, and – crucially – to lift the quality of education offered.
Most Anganwadis operate primarily as nutrition or day-care centres with no staff formally trained in child development. Only half have basic tools for learning, like appropriate books, draw-ing materials, and puzzles, the government found in 2011. More than three-fifths of staff receive no help from supervisors to plan or execute educational activities, according to one recent study.
According to Abusaleh Shariff, Chief Scholar of the US India Policy Institute and Amit Sharma, Consultant with the World Bank in New Delhi and People Research on India’s Consumer Economy, there would be significant benefits from focused investment in early childhood education.
First, they analyse the effectiveness of cash incentives to expand access further. Cash vouchers have lifted pre-school attendance in rural China. Using a similar incentive structure in Andhra Pradesh, they find this would be equivalent to offering about Rs. 6,000 to the family of a four-year-old to attend pre-school education programs at Anganwadis in the state, regardless of the parents’ income. The total cost for Andhra Pradesh would run to about Rs. 333 crore per year.
Such an incentive will likely result in a 35% increase in pre-school enrolment, taking enrolment to 66%. This will lead to an addition of 1.4 lakh new 4-year-olds to the state’s Anganwadi preschool education program.
Early learning can help increase later academic achievement, build a desire to learn and aid better social and emotional development. Perhaps, the most well-established result is that access to preschool education translates into an increase in future wages. Even using a conservative approach of only identifying how much more children will earn given a year of pre-school education than those who remain illiterate means an average wage increase of 23% when children grow up. For each child helped, that means more than two lakh rupees over a lifetime, or Rs. 3,146 crore for all of Andhra Pradesh. In all, every rupee spent would generate benefits worth 10 rupees to society.
This approach would expand access. But how can India lift the quality of preschool education in Anganwadis? The researchers look at a model already being used successfully in Karnataka. This would see spending of about Rs. 7,000 per year on each child aged 3-6 years enrolled in Anganwadis, on improving the quality of preschool education.
They suggest partnering with accredited localized organizations that focus on early childhood education and development, such as the Hippocampus Learning Centers in Karnataka. This would be enough to hire one teacher per centre, improve the curriculum, train existing Anganwadi staff, and provide uniforms and books for students. One teacher would come to the centre every day for one year.
The effect of such an intervention is based on the demonstrated effectiveness from private school pre-school programs. While private pre-schools are not perfect, they are generally regarded as providing a more appropriate environment and curriculum for children than Anganwadis.
Bringing the quality of preschool education provided through Anganwadis to a level with private preschools would cost about Rs. 1,183 crore per year for all the 3-6 year-olds currently enrolled at Anganwadis in Andhra Pradesh.
The researchers’ analysis concludes that this would lead to a 13% increase in average wages for the children when they grow up, a present value of Rs.1.3 lakh per child. With a cost of Rs. 7,000, that means each rupee spent on higher quality education generates a very generous return of Rs.18.  Investment in expanding early childhood education access and improving quality would transform lives for many years to come.

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