Study finds economic benefits of early education

For more than 18 years, Arthur Reynolds has studied the long-term benefits of an early childhood educational program. While his previous papers have documented the positive effects of the particular program on children’s behavior and well-being, the latest documents its positive effects on the economy.

Results from the cost-benefit analysis, recently published in the Winter 2002 issue of Educational Evaluation and Policy Analysis, could help policymakers determine future funding for such educational programs.

Reynolds, a professor of social work, educational psychology and human development and an investigator at the Waisman Center at UW–Madison, and Judy Temple, an economist at Northern Illinois University, completed a cost-benefit analysis of the federally funded Chicago Child-Parent Center program (CPC).

The program, funded by Title I of the No Child Left Behind Act, serves children between the ages of 3 and 9 who are from low-income families in Chicago’s inner city. It provides comprehensive services and emphasizes literacy skills and parental involvement.

As part of the Chicago Longitudinal Study started in 1985, Reynolds has been studying the effects of CPC on the lives of those who have attended it. He and his team have tracked the experiences of more than 989 program and 550 comparison-group youth from preschool to early adulthood.

Over the years, he has found that, relative to the comparison group, children who attended the preschool program had a 20 percent higher rate of high-school completion (a rate of 61.9, compared to 51.4, percent), a 42 percent lower rate of juvenile arrest for violent offense (9.0 vs. 15.3 percent), a 41 percent reduction in special education placement (14.4 vs. 24.6 percent), and a 52 percent reduction in abuse and neglect (5.0 vs. 10.3 percent). The percentage of program children at or above national norms in cognitive-literacy skills (at age 5) and school achievement (at age 14) was higher by 86 and 59 percent, respectively.

Most of these benefits, says Reynolds, translate into economic returns.

In the most recent study, the researchers, along with UW–Madison graduate students Dylan Robertson and Emily Mann, looked at five categories of benefits: reduced need for grade retention and special education, reduced juvenile and adult crime arrests, averted costs to crime victims, reduced child welfare expenditures and greater earning potential due to educational advancement. With respect to each category and known expenditures, such as the cost of repeating a school year, they calculated the program’s economic impact in 1998 dollars.

Based on their analysis, the researchers found that attendance in the preschool program for 18 months – averaging a cost of $6,692 per child – generated a return to society of $47,759 per participant. This figure includes increased taxes on earnings due to educational attainment ($7,243), savings to the criminal justice system ($7,130), reductions in school remedial services ($4,652) and averted tangible costs to crime victims ($6,127).

“Each of these benefits exceed the cost of just one year of the preschool program, which costs about $4,400,” explains Reynolds.

The economic benefits also exceeded program costs when the participants attended preschool for one or two years, attended only the school-age program or attended the entire program, lasting between four to six years.

“What these numbers indicate is that the earlier the intervention takes place, the greater the return,” says Reynolds.

Overall, every dollar invested in the preschool program returned $7.14 in individual, educational, social welfare and socioeconomic benefits. Every dollar invested also generated $3.85 to the general public through government and crime-victim savings. Comparatively, every dollar invested in the school-age program and the extended program returned $1.66 and $6.11, respectively.

But Reynolds notes that not all early education childhood programs will produce the same economic return. “Many programs don’t have the level of quality that the CPCs offer,” he says, adding that CPC classes take place in public schools, are taught by teachers with bachelor’s degrees and certification in early childhood, and offer a breadth of services to both child and parent.

“One of the reasons we did this study was to show the benefits of the CPC in more economic terms,” says Reynolds, who notes that the CPC program is the first federally funded early childhood program studied for its costs and benefits.

Reynolds notes, however, that two other early education programs – the High/Scope Perry Preschool Project and the Carolina Abecedarian Project – also have demonstrated high economic returns. Findings from these programs, as well as from the CPC, were highlighted at a recent conference of the Society for Research in Child Development.

Reynolds says that Nobel prize-winning economist, James Heckman, who participated in the session on these programs, commented on the economic benefits of such early education programs. “As Dr. Heckman explained,” recalls Reynolds, “the benefits of investments in early education found in the CPC, Perry and Carolina studies significantly exceed the benefits of programs that begin later in life.”

Reynolds says that the government currently spends $20 billion a year for early childhood education programs. “Given the level of funding and the tough budget times,” he says, “it is precisely now that we need to provide evidence of what these programs can do, not just for children, but also for society at large.”

The Chicago Longitudinal Study is funded by the National Institute of Child Health and Human Development and the U.S. Department of Education. For more information about this study, visit http://www.waisman.wisc.edu/cls/.