Sustainable Surplus: Investing in Chile’s youth
In 1990, the first Government of the Coalition of Parties for the Democracy – Concertación – assumed the call raised by the Convention on the Rights of the Child. Each Chilean Government since has taken action to fulfil this commitment. Important progress has been made in the area of child rights, particularly during the administration of President Bachelet, with the introduction of several new social programmes that focus on children’s development and that are supported by a sustainable fiscal policy and a long-term vision.
Investment in Chile’s children is socially and economically justified, and the sooner it begins, the bigger its impact can be. Numerous studies have gathered evidence on the positive long-term effects of preschool education, confirming that the first years of childhood are critical to the development of skills that accompany us throughout our lives. These studies demonstrate that children who receive quality preschool will later have better educational performance, a greater probability of enrolling in tertiary education, a higher future income and lower levels of criminal behaviour.
Childhood policies, particularly those aimed at enhancing preschool attendance, positively affect fairness and equality of opportunity by offsetting the differences in children’s backgrounds. Additionally, these policies are a powerful short-term tool to stimulate the participation the female labour force participation rate in Chile, which despite its recent improvements, remains below that of developed countries. Over 30 per cent of heads of households in the poorest sectors of the country are women, who have a higher need for free childcare provision. The public preschool provision and free childcare services favour not only these mothers by facilitating their entry in the labour market, but also their children, who benefit from greater family income, therefore becoming more likely to leave poverty behind.
Policies into practice
In the first months of 2006, President Bachelet convened a Presidential Advisory Council made up of specialists of varied disciplines, with the mission of developing proposals for the reform of childhood policies in Chile. Most of these proposals, which set up a system based on rights protection to increase equality of opportunity, were implemented and funded by the Government in the following years.
In the context of this reform, the Integrated Child Protection System – Chile Crece Contigo – was created in 2007. This system includes a set of cross-sectoral actions that integrate children in a supportive network and monitor their growth and development. An important programme within Chile Crece Contigo is the ‘Biopsychosocial’ Development Programme, which benefits children from the womb to four years of age by combining health screenings with initiatives geared to stimulate them and avoid lags in their development. The coverage of this programme has gradually expanded to reach a larger age range and geographical spread of children, resulting in the participation of more than 1 million children in the programme this year alone. Additionally, by adopting a child rights-based approach to social programming, the Government established an automatic subsidy per child for lower-income families, which benefits nearly 1.4 million people. Currently, Congress is reviewing a draft law that institutionalizes Chile Crece Contigo and assures its future financing.
Taking into account the importance of preschool education for the development of children and the insertion of their mothers in the labour market, the Government committed to a historical plan to increase preschool coverage. In the four years of this administration, public supply of free childcare centres will have increased fivefold at a rate of 900 new rooms per year, offering places this year for a total of 85,000 children from 0-2 years old from the poorest 40 per cent of the population. This represents an increase in coverage from 3 per cent to 17 per cent.
Opportunities for all
During the present administration, pre-kindergarten education was integrated into the Government’s school voucher system, thereby guaranteeing it for all children. Today, these vouchers benefit approximately 120,000 children and help provide them with schooling and meal programmes. Resources were also invested to extend the school day of pre-kindergarten and kindergarten students for the subsidized schools that request it.
Finally, the differentiated voucher scheme for the most vulnerable children enrolled in primary education was implemented in 2008. This voucher not only increased resources for the most disadvantaged students, it also introduced incentives to increase the quality of education students received. This scheme reaffirms the principle of non-discrimination, ensuring that equality of opportunity for students regardless of their socio-economic status becomes a reality. The differentiated voucher will benefit 750,000 students per year.
None of these measures would have been possible without the combination of two fundamental factors: the will of the President to give child protection policies the priority they deserve, and a serious macroeconomic policy that assures the resources needed for its implementation – regardless of the external shocks that are affecting the economy. An important benefit of the fiscal surplus rule that we have applied in Chile is that expenditure is not linked to the transitory components of income, which, in the context of the current crisis, allows for the use of the resources saved by our country during the boom years. This has enabled us to ensure the continuity of the social protection system that is the seal of the Government of President Bachelet and that is at the heart of the Convention on the Rights of the Child.
Andrés Velasco was appointed as Chile’s Minister of Finance in 2006. He received a bachelor’s degree in economics from Yale University and a PhD in economics from Columbia University. Dr. Velasco has held a number of academic appointments and postdoctoral fellowships and is a leading expert in development economics. He has served in several positions in the Government of Chile, in addition to working as a consultant for the World Bank, the Inter-American Development Bank, the International Monetary Fund and several Central American governments. Dr. Velasco does not hold a political affiliation.
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