Education is recognized as a driver of other development goals and one of the leading paths to sustainable development. Early childhood education (ECE) in this regard provides a multifaceted benefit, and if done well, it is one of the smartest investments for addressing poverty. The benefits range from creating job opportunities for service providers, enabling parents to pursue careers, and helping children reach their potential by setting the foundation for later learning and skill development, promoting children’s school readiness, providing additional spillover benefits, such as higher educational attainment and adult earnings, and reducing special education placement and repetition, which in turn is highly associated with economic costs. Benefits from ECE are more pronounced for children from low-income backgrounds. Evidence from a study that examined the impact of preschool programs targeted at children from low-income families over the life cycle and across generations showcased a lasting benefit of access to preschool on adult educational attainment, earnings, and survival beyond age 65. Notwithstanding the growing evidence base on the advantages of ECE and a growing commitment across many global-level actors and low- and middle-income countries to the ECE issue, the sector still struggles with being a low policy priority,5 with insufficient financing limiting its expansion.

Sustainable Development Goal (SDG) 4 specifically focuses on education, with goal 4.2 outlining commitment by 2030 to “ensure that all girls and boys have access to quality early childhood development [ECD], care and pre-primary education so that they are ready for primary education.” Enormous progress has been made in improving education outcomes in the past couple of decades. Reports indicate that access, literacy, learning, and financing gaps (particularly in ECE) remain a challenge of the sector, while progress on SDG 4 has dwindled in recent years, even before COVID-19 exacerbated the learning crisis. While advocacy efforts continue to increase investment in education, improving the effectiveness of developmental financing has equivalent importance for achieving results in high-quality education at global and national levels. As such, costing and financing initiatives are growing in their relevance to enhancing the efficiency and effectiveness of education finance. Also, providing key information on costing/financing options supports national and international stakeholders in their education policymaking decisions.