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In my last column, I argued that all infrastructure investment is not the same. If we are to embark on massive investments to stimulate the economy, we should do so with an eye toward producing benefits in the long term. And I argued that education is one such investment.

This assertion generated a lot of pushback from people who feel passionately that any stimulus package should focus on creating jobs right now. Clearly that's important, but it is also not a long-term fix, particularly when the jobs to be created are not likely to be the high-quality, long-term career positions that make for a successful economy. From this perspective, investing in human capital is the way to go. This is not just opinion--there is a lot that we know about the returns to investing in human capital, and we know more and more all the time about which investments yield good returns.

The most essential reading on this topic is The Race Between Education and Technology, by Claudia Golden and Lawrence Katz. Goldin and Katz give a broad historical view of the role of education in economic growth in the U.S. They make the case that, after a century of leading the world in supplying the educated workers needed to serve technology, the U.S. has fallen behind in education. There is other important research by James Heckman of the University of Chicago and Arthur Rolnick of the Federal Reserve Bank of Minnesota on the returns to early childhood education.

Any discussion of investments in education with the goal of preparing the workforce of the future needs to begin in early childhood. In the first five years of life, children undergo tremendous development. If children receive support for growth in language, development of motor skills, social skills and emotional support, they are more likely to succeed in school subsequently and to later contribute to society. Absent that kind of early development, children are more likely to drop out of school, commit crimes and require support from the welfare system. These are the costs that society bears.

Estimates are that early childhood education programs that are focused on children at risk produce returns of as much as 7%-16%, a large portion of which are social returns. This is a good investment. Some of these returns will be lost if the K-12 education system is broken and some of the disappointing results on the benefits of Head Start programs are due to deficiencies in the school systems that the children encounter subsequently. Clearly more has to be done at this level.

Education, as we all know, is a cumulative process. Thus, calling for a highly educated workforce implies, almost by definition, that individuals receive both early childhood development and a solid education from kindergarten on up. Programs like Head Start are important, but without a strong K-12 education that builds upon those accomplishments, students will not be ready to move on to college education.

Unfortunately, as Goldin and Katz document, we have faltered--and even fallen behind--in K-12 education by many measures. One example is that the secondary school graduation rate has declined significantly in the last 25 years.