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Economics of Early Education

Benefits and Costs of Quality Early Education for All

Presentation to the Pre-Kindergarten Education Study Committee

Vermont General Assembly

October 27, 2006W. Steven Barnett, Ph.D.

National Institute for Early Education Researchwww.nieer.org

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Impacts of Quality Early Education

Increased Educational Success and Adult Productivity Achievement test scores Special education and grade repetition High school graduation Behavior problems, delinquency, and crime Employment, earnings, and welfare dependency Decreased Costs to Government Schooling costs Social services costs Crime costs Health care costs (teen pregnancy and smoking)

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Randomized Trials

Long Term Perry Preschool, IDS, Early Training Project Abecedarian, Milwaukee, CARE IHDP (not Disadvantaged), Houston PCDC Mauritius Preschool Study

Short Term National Early Head Start National Head Start Many smaller scale studies

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Quasi-Experimental Studies: Follow-up Into School Years Chicago Child Parent Center Study (12th grade) Michigan School Readiness (4th grade) South Carolina Pre-K (1st grade) New York Pre-K (3rd Grade) Ludwig & Miller Head Start (12th grade +) RAND National study of 4th grade NAEP Belfield & Schwartz ECLS-K (5th grade) Cost Quality and Outcomes (3rd grade) Vandell NICHD Early Care and Education Early Provision of Preschool Education (England)

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Strong Quasi-Experimental Studies: New Results at Kindergarten

Georgetown U., Tulsa, OK (All) NIEER, Rutgers U.

OK (All) WV (All) AR (Disadvantaged) MI (Disadvantaged) SC (Disadvantaged) NJ (All in 31 districts with high poverty)

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Three Benefit-Cost Analyses with Disadvantaged Children

Abecedarian Chicago High/Scope Year began 1972 1985 1962Location Chapel Hill, NC Chicago, IL Ypsilanti, MISample size 111 1,539 123Design RCT Matched

neighborhoodRCT

Ages 6 wks-age 5 Ages 3-4 Ages 3-4

Program schedule

Full-day, year round

Half-day, school year

Half-day, school year

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High/Scope Perry Preschool: Educational Effects

45%

15%

34%

66%

49%

15%

0% 10% 20% 30% 40% 50% 60% 70%

Graduated from highschool on time

Age 14 achievementat 10th %ile +

Special Education(Cog.)

Program groupNo-program group

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High/Scope Perry Preschool: Economic Effects at Age 27

20%

13%

7%

41%

36%

29%

0% 10% 20% 30% 40% 50%

Never on welfare asadult

Own home

Earn $2,000 +monthly

Program group

No-program group

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High/Scope Perry Preschool: Economic Effects at 40

Source: Schweinhart et al., 2005

50%

62%

40%

76%

76%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Had SavingsAccount

Employed

Earned > $20K

Program groupNo-program group

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High/Scope Perry Preschool: Arrests per person by age 27

1.5

0.7

2.5

1.2

0.6

0.5 2.3 arrests

4.6 arrests

0.0 1.0 2.0 3.0 4.0 5.0 6.0

No program

Program

Felony Misdemeanor Juvenile

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Perry Preschool: Crime Effects at 40Source: Schweinhart et al. 2005

34%

48%

55%

14%

33%

36%

0% 10% 20% 30% 40% 50% 60%

Drug Crime

Violent Crime

Arrested > 5X

Program group

No-program group

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Abecedarian : Academic Benefits

13%

51%

55%

48%

36%

67%

31%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80%

4 Yr College

HS Graduation

Grade Repeater

Special Education

Program groupNo-program group

13

80

85

90

95

100

105

8 10 12 14 16 18 20 22

AGE (Years)

RE

AD

ING

SC

OR

E

TREATMENT

CONTROL

Abecedarian Reading Ach. Over Time

14

80

85

90

95

100

105

8 10 12 14 16 18 20 22

AGE (Years)

MA

TH

SC

OR

ES

TREATMENT

CONTROL

Abecedarian Math Achievement Over Time

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Chicago CPC: Academic and Social Benefits at School Exit

25%

38%

25%

39%

17%

23%

14%

50%

0% 10% 20% 30% 40% 50% 60%

Juvenile Arrest

Grade Repeater

Special Education

HS Graduation

Program groupNo-program group

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Economic Returns to Pre-K for Disadvantaged Children

Cost Benefits

B/C

Perry Pre-K $16,264 $277,631 17.07 Abecedarian $36,929 $139,571 3.78 Chicago $ 7,417 $ 52,936 7.14

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Perry PreschoolCosts Benefits

Crime$173,959

Employment$79,743

Child Care$919 Welfare

$774K-12 Schooling

$8,556

Program Cost$15,386

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AbecedarianCosts Benefits

Program Cost$63,476

Maternal Employment

$68,728

Employment$37,531

Child Care$27,612

HealthSmoking$17,781

K-12 Schooling

$8,836Welfare

$196

Future Employment

$5,722

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Chicago CPCCosts Benefits

Employment$31,459

Crime$15,023

K-12 Schooling$5,521

Abuse/Neglect$338

Welfare$535Child Care

$1,878Program Cost

$7,584

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Could Universal Pre-K Produce Similar Benefits for the Middle Class?

Middle class children have fairly high rates of the problems that preschool reduces for low-income children.

Reducing these problems could generate large benefits.

Income Retention DropoutLowest 20% 17% 23%20-80% 12% 11%Highest 20% 8% 3%

Source:US Department of Education, NCES (1997). Dropout rates in the United States: 1995. Figures are multi-year averages.

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Access to Any Pre-K or Child Care Center

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Cognitive Readiness Gap—Half as Big at Median as for the Poor (bottom 20%)

Abilities of Entering Kindergarteners by Family Income--National Data, Fall 1998 (reported by NIEER from ECLS-K)

40.0

45.0

50.0

55.0

60.0

Low est 20% 2nd Low est20%

Middle 20% 2nd Highest20%

Highest 20%

Reading

Math

GeneralKnowledge

School Readiness Gap

Abilities Scores

FamilyIncome

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Social Readiness Gap—Half as Big at the Median as for the Poor (bottom 20%)

Social Skills of Entering Kindergarteners by Family Income (NIEER Analysis of ECLS-K)

8.00

8.20

8.40

8.60

8.80

9.00

9.20

9.40

9.60

9.80

Lowest 20% 2nd Lowest 20% Middle 20% 2nd Highest 20% Top 20%

SocialSkills

School Readiness Gap

Social Scores

FamilyIncome

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Effects of Today’s Programs

New rigorous studies Large scale public (Head Start & State) One year of quality public Pre-K at 4 Effects of policy at entry to Kindergarten Universal and targeted programs Standardized tests Estimate effects by income and ethnicity

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Oklahoma’s Pre-K for All

3,028 children in Tulsa public schools Rigorous RD design Gains for all SES & ethnic groups Literacy and Math gains

Smaller than Perry and Abecedarian Similar to CPC

Larger gains for minority and poor children

Source: Gormley et al. (2004). CROCUS/Georgetown University

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NIEER Evaluation of 6 State Pre-K Programs

Over 6,000 children in 6 States OK and WV are for all children NJ for all children in 31 districts AR, MI, & SC targeted Gains from Pre-K in all 6 states Gains in language, literacy & math All children gain, low-income gain more Source: Barnett et al. (2005). NIEER/Rutgers University, plus new AR report.

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Oklahoma 4th Grade NAEP Scores Before and After Pre-K for All

YEAR White Black Hisp. Indian

2002 Reading 220 188 197 209

2003 Reading 220 195 200 206

2005 Reading 219 196 204 211

2000 Math 229 205 207 221

2003 Math 235 211 220 225

2005 Math 240 217 226 229

Reading gains are not statistically significant; math gains are statistically significant for Whites and Hispanics (2000-05).

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Georgia 4th Grade Math NAEP Scores Before and After Pre-K

YEAR White Black Hispanic

1996 224 201 205

2000 230 204 217

2003 241 217 219

2005 243 221 229

Gains from before to after UPK are statistically significant.

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Georgia 4th Grade Reading NAEP Scores Before and After Pre-K

YEAR White Black Hispanic

1998 221 191 Not Avail.

2002 226 200 200

2003 226 199 201

2005 226 199 203

Gains from 1998 to 2005 are statistically significant.

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Is Targeting More Cost-Effective?

Targeting is costly and imperfect Poverty is a moving target Need is not defined by poverty alone Accurate identification is difficult

Benefits do not stop at the poverty line Middle class has similar problems Benefits decrease gradually with income

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Comparing Targeted Pre-K and Pre-K for All

Targeted Pre-K has Lower CostPre-K for All Children:

Reaches all disadvantaged childrenProduces larger gains for disadvantagedProduces good gains for childrenYield larger net benefits

Source: Barnett (2004). Maximizing returns from pre-kindergarten education. Federal Reserve Bank of Cleveland Research Conference.

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High Quality Preschool Programs Needed to Produce Benefits

Well-educated, adequately paid teachers

Good curriculum and professional development

Small classes and reasonable teacher:child ratios

Strong supervision, monitoring, and review

High standards and accountability

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Conclusions

Preschool can be a sound investment

High quality is needed for high returns

High standards and adequate resources are necessary but not sufficient

Plan-Do-Review is also needed

Universal can be more cost-effective