The research, led by a Michigan State University education scholar, suggests students may be ready for more direct math instruction when they enter school.
"Contrary to the view that young children do not understand place value and multi-digit numbers, we found that they actually know quite a lot about it," said Kelly Mix, MSU professor of educational psychology and co-author of the study.
"They are more ready than we think when they enter kindergarten," Mix said.
Understanding place value is the gateway to higher math skills such as addition with carrying, and there is a strong tie between place value skills in early elementary grades and problem-solving ability later on.
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In several experiments, Mix and Richard Prather and Linda Smith, both from Indiana University, tested children ages 3 to 7 on their ability to identify and compare two- and three-digit numbers.
In one task, for example, children were shown two quantities (such as 128 and 812) and asked to point out which was larger.
"There was significant improvement in interpreting place value from age 3 to 7 but it was remarkable that even the youngest children showed at least some understanding of multi-digit numbers," Mix said.
Interestingly, children may be developing partial knowledge of the place value system at least partly from language, she explained.
Children often hear multi-digit numbers named while also seeing them in print, such as when parents comment on a calendar, ask their child to push the elevator buttons or look for a room number in an office building.
The study was published in the journal Child Development.