If a 3-year-old's teacher adds $320,000 to the future income of that child's class, should we pay a bit more to keep that teacher in ajob? Or would you rather have a tax cut now?

My journalist-trained colleagues on Pundit probably will wince at my opening with such a hackneyed cliche, but everything changes when you have children of your own.

In particular, issues that previously caused your eyes to glaze over with boredom suddenly come to seem of vital importance. Immunization regimes. Car safety standards. Teaching methods and modes of assessment. And so on.

Frankly, I think this is one of the reasons for the "those with children/those without children" split that seems to develop once the members of a previously close social group begin reproducing. Those who have kids suddenly find a whole lot of new, interesting things they desperately want to talk about. Those without just couldn't care less. Conversations suddenly become a lot more difficult to maintain.

All of which is by way of explaining why I'm posting on the topic of early childhood education, something that I wouldn't have thought twice about a couple of years ago. A quick backgrounder.

The previous Labour Government adopted a couple of policies that radically transformed the sector. First, it introduced the "20 Hours Free" policy, which provided universal, government-funded education for 3 and 4 year olds. Second, it gave higher subsidies to early childhood education centers employing staff with teaching qualifications.

The idea was to ensure that every child had the opportunity to receive some level of early childhood education, whilst encouraging centers to recruit and employ staff who had been taught how to teach young children.

Now, these policies weren't perfect, and created challenges that any government elected at 2008 was going to have to confront. (There's a good academic discussion of the policy's background and future challenges here.) Which is where National's 2010 budget comes in.

Before the election, National had essentially promised to not only retain Labour's 20 Hours Free policy, but to expand it in some areas. You might see this as a part of its broader tactic of reassuring "middle New Zealand" voters that a change from Labour would not represent a major realignment on issues of social policy (hence the retention of interest free student loans, Working for Families, and the like).

But having committed to keeping 20 Hours Free, National also faced the problem that it wanted to find savings in social spending to help fund its flagship tax cuts. So it looked to the second of Labour's policies, and decided to cap the higher subsidy payments so that they apply only up to 80% of a center's teaching staff. If a center has more than 80% of its staff with qualifications (and hence receiving higher wages), then the center will have to either fire them or fund them from other sources ... such as fees from parents.

Bill English was quite open about the reasons for this move:

There has been very significant spending in early childhood, that's been a big benefit to families and we want to make changes that will mean we can maintain that significant level of support, there's a risk that is we just let spending run away that down the track there'd be more drastic decisions have to be made.

In other words, if the Government kept funding qualified teachers at a higher level, and more early childhood centers become fully staffed by qualified teachers, then it would cost lots and lots of money.

That is undeniably true. But it raises the question: is spending money on the care of young children best seen as a subsidy of babysitting costs that permits parents time to do other things, or a long-term investment in the education of future generations?

I suspect that the former view underpins the Government's decision. It's certainly one that has a foothold in society at large - witness this New Zealand Herald editorial on the issue. And if this is the view you hold, then it is manifestly silly to spend more money on such caregivers just because they hold a piece of paper saying they know how to teach.

But I wonder if this isn't one of those issues where your views will be skewed by whether you currently have young kids. Certainly, this (admittedly Australian) survey indicates that parents do care about whether their child's carer holds a teaching qualification (amongst other factors, of course ... no parent wants Charles Manson or Cruella De Ville to look after their children, irrespective of his or her academic qualifications for the job!)

And there would seem to be good reason for wanting your child's carer to offer more than being a happy person who sings nursery rhymes to them. This NY Times article - published, interestingly, in the paper's Business section - covers a US study tracking the effect that kindergarten teachers have on the future earnings of their students. It's conclusion?

[The researchers] estimate that a standout kindergarten teacher is worth about $320,000 a year. That’s the present value of the additional money that a full class of students can expect to earn over their careers. This estimate doesn’t take into account social gains, like better health and less crime.

(The study's powerpoint slides are here, for those interested in looking at it further.)

Now, of course there's no guarantee that a given early childhood educator with an academic qualification will necessarily be a better teacher than a given educator without one. But it seems to me that overall, in the main, across the board, that will be the case. Or, at least, if that isn't the case, then our entire system of teacher training for all age groups probably can get chucked out the window.

Which then brings us to the crux of the problem with the Government's move. Early childhood education centers with fully qualified staff cost more to operate, and following the Government's decision they will charge higher fees. (My daughter's center, for instance, is signaling that it'll have to charge over $40 a week more for kids under 2.)

I've no doubt that a lot of parents will find the money to pay those fees - goodbye to my upcoming tax cut, though! However, a number of parents won't be able to - or will choose not to - find the extra money. Which will mean their children will in many cases, overall, across the board receive a lower quality of education (and hence suffer lower incomes as adults).

So, the question arises. Even if Bill English is saving money through his cuts, in doing so is he stealing from the futures of those whose parents cannot (or will not) afford to pay the difference?