Professor Jim Heckman (University of Chicago and 2004 Nobel Prize winner) presented a very interesting lecture on education policy here at the University of Melbourne. The main insight from his work is how effective (and productive in a social rate of return sense) early childhood interventions are. These are not to improve IQ but to prove the 'softer' stuff that allows you to make use of your IQ (e.g., motivation, social awareness, etc). What you experience prior to age 6 (!) is apparently critical in this.
His papers are available on the web. But if I relate these findings to those in an earlier blog about IR reforms, I worry if the cost of those reforms is going to be much greater economically than anyone has appreciated to date. Coupled with the government's lacklustre approach to childcare and we are working in the wrong direction on this one.