This article highlights the changing nature of childhood, with increasing physical and mental health problems, substance abuse, child abuse, inadequate child care, and family disorganization. Furthermore, schools struggle to meet the needs of non-middle-class, nonwhite, non-English-speaking children, as more students from these backgrounds enter public schools. To improve educational prospects, school leaders must recognize how children's daily lives affect their education and adapt to these changes.

The growing demand for compensatory education and for child care has generated a rash of federal legislation; many states have enacted new early childhood programs, most of them located within schooling systems, and many others are considering their options. This article examines the basic policy issues governments confront in early childhood education, including the content of programs, their financing, and the inevitable trade-off between cost and quality. The final section of the article outlines the available policy options.