The finding in a study funded by the U.S. Department of Education's Institute of Education Sciences has implications for U.S. students who are losing ground internationally in mathematics performance, they said.
"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," study co-author Kelly Mix of Michigan State University said.
"They are more ready than we think when they enter kindergarten," said Mix, a professor of educational psychology.
Working with colleagues from Indiana University, Mix 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," Mix said, "but it was remarkable that even the youngest children showed at least some understanding of multi-digit numbers."
Understanding place value -- ones, tens, hundreds -- 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, the researchers said.
"In short, children who fail to master place value face chronic low achievement in mathematics," they said in reporting their study in the journal Child Development.