High ROI: Why preschool programs are a good investment for society

Investing in high quality preschool programs can yield up to a 13 percent annual return, according to a new study that measured the economic impact of such programs over decades.

Preschool programs aren’t cheap, but investing in them could yield returns that stretch far beyond the students’ futures and impact society, according to a new study, one of the first to examine the economic impact of early childhood education programs well into students' early careers. 

The study, released Sunday from researchers at the University of Chicago and the University of Southern California, shows that rolling out quality education programs for disadvantaged children can result in high investment returns, with around a 13 percent annual return rate, producing around $6 for every dollar spent. That profit comes in the form of parental labor earnings and savings in the healthcare and criminal justice systems, components that haven’t been considered as extensively in past analyses of early childhood education.

Such initiatives can cost around $18,000 per student annually – almost $2,000 more than the federal poverty level for a two-person household. But more researchers and politicians are starting to see the payoff of that significant initial expense. While a growing coalition has already heralded the benefits of preschool and pushed for universal early childhood education, this study is one of the first to track students into their 30s, showing how education enriches not only the lives of the students, but also their parents and society, through high monetized returns on investments.

“[High quality early education] gave the family more resources. It also gave the child a rich environment,” says James Heckman, a Nobel laureate in economics and professor at the University of Chicago who co-authored the paper. “It attaches the women to the workforce,” making its benefits more socially inclusive, he says.

Returns on the investments in high quality early education have yielded striking results, but it’s important to distinguish the difference between the programs in the study and lower quality programs that may cut corners to save costs and tend to trap children from disadvantaged families in a cycle of poverty, Dr. Heckman tells The Christian Science Monitor in a phone interview.

“Low quality education has an intergenerational dimension,” he adds. “It actually is producing children who may be impaired relative to those who have quality care.”

The study examined two programs in North Carolina that began in the 1970s. Each works with children as young as eight weeks old through early school age, around five. The nine-hour-long programs served predominately low-income, African-American children, many of whom had single mothers who would not have been able to work or pursue education without such programs. 

Much of the study's data comes from after the children left full-time care, including three years of additional academic support for children ages 5 through 8, and following up until they were 35. The longitudinal data allowed researchers to track how the students performed in higher education and into adulthood. What they found might not be too surprising for early education advocates: those who had an early, engaging education were less likely to commit crimes, more likely to lead healthy lives, and often managed to climb the rungs of the socioeconomic ladder. What may come as a surprise, however, is just how high the financial return on investment for such programs is.

Other studies have shown that the number of high quality pre-K programs nationwide is lacking, but there are efforts to turn that movement around. More philanthropists are donating to early education efforts as awareness of their benefits grows; earlier this year, Harvard’s Graduate School of Education received $35.5 million to fund research and teaching geared toward such programming.  

"It's really about research and building capacity," James Ryan, the dean of the School of Education, told Harvard Magazine at the time. "There's a great deal of really promising evidence about the benefits of high-quality pre-K. But there aren't enough high-quality pre-K programs, and there's not enough clarity on the essential components of a high-quality pre-K program. The initiative will take the evidence about the benefits of pre-K and build capacity in the field to make sure high-quality pre-K is available to all kids."

As Dean Ryan's comment emphasizes, it's not just about pouring money into programming, researchers say. The success of the North Carolina schools comes from how they engaged students and parents in the education process, overcoming one of the biggest discrepancies in early childhood experiences. The study primarily draws conclusions about disadvantaged children, but Heckman says that engagement and education efforts are likely playing a similar role in middle and upper income families, who are often in a position to provide more engagement, from help with homework to after-school activities. 

Research has shown that children in low-income families likely have fewer opportunities to interact and engage with their parents, meaning they could hear some 30 million less words in the first four years of their life when compared with those born into higher socioeconomic households – a gap that has a lasting effect on students' performance. 

By bringing parents into the school and involving them in the educational process, the programs were able to showcase the students’ successes and help parents stay engaged in their children’s education, which had lasting effects and likely contributed to closing some of the gaps between the disadvantaged children and their peers in other circles.

There is one caveat to some of the study’s findings: the measures used to dictate who qualifies as a disadvantaged student. In 1972, 43 percent of African-American children were eligible for such programs, compared to just 19 percent in 2014. That number, Heckman says, has decreased as trends have changed, with fewer teenagers becoming mothers and more families rising above the poverty level.

Still, he says, it doesn’t measure all of the risk factors that could place children in the disadvantaged category, and states and schools may better serve the youngest members of their communities by redefining the 40-year-old metrics.

“What you’re finding is that children are at much lower risk. It’s really using the same measure, the question is whether or not those are the right measures,” he says. “I think it’s a huge mistake to consider child poverty just to be a matter of income.”

That’s something, along with the quality of education provided, that President-elect Donald Trump’s administration and members of Congress should consider when delving into education policy, Heckman stressed. The president-elect has said little about early childhood learning, but has focused his education messages on school choice and decreasing the cost of child care. He has opposed "education through Washington, D.C.," as he criticized Common Core, although the program was adopted by state legislatures. Rep. Tom Price (R) of Georgia, Mr. Trump's pick for secretary of the Department of Health and Human Services, has previously advocated for some states to control their Head Start programs.

“My hope is the Trump administration will also look at the child education quality,” Heckman says. “The structure of these programs is very costly. But that’s a very foolish way to think about these things.”