The Economics of Hope: Why Early Childhood Education Delivers the Highest Returns

At our recent Focus on Education event in Hong Kong, we explored the powerful impact of early childhood education and why Family Academy has become a cornerstone of ICM’s approach to breaking the cycle of ultra-poverty.

The Nobel Prize-Winning Case for Early Investment

Professor James Heckman won the Nobel Prize in Economics for good reason. His work proved something remarkable: early childhood development directly influences economic, health, and social outcomes for individuals and society.

As Heckman succinctly put it: “The highest rate of return in early childhood development comes from investing as early as possible, from birth through age five, in disadvantaged families.”

At ICM, we’re all about return on investment. When we look at the graph of dollars invested versus economic return across different life stages, the message is clear—investing early yields extraordinary returns that far outpace interventions attempted later in life.

The Reality of Education for Families in Ultra-Poverty

For the poorest families we serve, education is a tremendous struggle. In the Philippines, just 17% of our household heads graduated from high school. In Guatemala, that number drops to a mere 4%. Most strikingly, in Uganda, 91% never attended any school at all—not a single day.

When household heads aren’t educated, their children—the poorest children—face overwhelming disadvantages when starting school. The gap between them and their peers with more educational support at home only widens over time.

Our Journey to Family Academy

ICM used to run kindergartens, and we were quite happy with how those went. At our largest, we operated 95 kindergartens across the Philippines and graduated 10,000 children over about a decade. But schools, even at ICM’s low cost, are expensive. You need a building, a teacher, materials.

So when we concluded our kindergarten program in 2016, we sought a truly scalable, low-cost solution to serve thousands of children at a time. At ICM, we say the scale of the solution needs to match the scale of the problem. And that’s how we envisioned Family Academy.

We launched in 2017, scaled up over the next few years, and have now served more than 20,000 children in the Philippines alone. Last year, we expanded to Uganda, and just a few months ago, we took the program to Guatemala.

Proof That It Works

We’re pleased to have conducted rigorous research with Oxford University which proves Family Academy’s impact. The study confirmed what we’ve observed firsthand: children who participate in Family Academy show significant improvement in their readiness for school.

Before Family Academy, only 4% of participating children were school-ready in math. After completing our program, that number jumps to 64%. Similarly, phonics proficiency increases from 19% to 60%.

How Family Academy Works

Ercile Trespuentes, our Director of Education who has been with ICM since 2001, explained the core strengths of Family Academy:

1. It empowers mothers—many don’t feel they can teach their children because they didn’t have an education themselves. But with training, they can. This empowerment benefits not just the child currently in Family Academy, but their younger siblings too.
2. It leverages volunteers from the community who are already known and trusted. This makes the program incredibly cost-efficient—just $50 per child, far lower than international benchmarks.
3. It’s customized for each child. The materials can be adapted for 3, 4, and 5-year-olds at different learning levels, with almost endless ways to use the materials to help children progress.

From the Philippines to the World

Family Academy’s success in the Philippines has made it a natural candidate for international expansion. We’ve now brought the program to Uganda and Guatemala, where it’s being embraced by communities facing similar educational challenges.

The model works because it addresses universal needs while allowing for cultural adaptation. We’ve created five different language versions of our educational materials, each customized to the culture of the area where we’re teaching.