The Return on Investing in Children

The federal government invests more than $500 billion annually in children through direct cash payments, including tax credits, and in-kind goods such as childcare, education, food subsidies, and healthcare coverage. This represents about 10 percent of the federal budget. Research shows these investments, which are often used to combat poverty, can have large short- and long-term payoffs for the children receiving the benefits and society at large. Though the payoff of any one investment can be difficult to assess, strong evidence suggests that investments that reduce poverty and direct resources at very young children have particularly high returns.