Preschool brings bigger than expected economic returns, economists say

Preschoolers start their day with ribbon stretching at Joy of Learning Academy in Rowland Heights.
Preschoolers start their day with ribbon stretching at Joy of Learning Academy in Rowland Heights. Deepa Fernandes / KPCC

New research from a team of economists that includes Nobel Prize-winner James Heckman has found that the long-term return on investment from money spent on public preschool is even larger than previously believed. 

The researchers found that for every dollar spent on the high-quality preschool programs they studied over time, there was a 13 percent return on investment in the form of earnings gains, health benefits and tax dollars saved on welfare and criminal justice spending.

Heckman made headlines in 2009 when he found that there was a 7 to 10 percent return on investment for each dollar spent on preschool for low income children. This latest research finds that return to be almost doubled.

A cost benefit analysis is rarely applied to discussions about expanding preschool access for those least able to afford it. The researchers from the University of Chicago and the University of Southern California took longitudinal data that followed a cohort of low-income, African American babies from birth to age 30. Some of the group received high-quality early education while the control group either had low-quality childcare or none at all.

Economist Jorge García, who co-authored the report, said that the quality preschool they studied cost about $90,000 for the four to five years of early care received.

“One thing that has been very criticized about this program is that it was very expensive, but the benefits outweigh the cost by so much,” García said.

The report finds a series of “lifecycle benefits” for the children who attended high-quality preschool and benefits for their parents as well.

The gains for parents include a “substantial increase in parental labor” during the time the child was in preschool, according to García. This resulted in $80,000 more in income for preschooler’s parents than the parents of children in the control group, he added.

Into adulthood, the preschool cohort themselves saw employment and earnings gains over their lives compared to the control group. For males in the study, those gains came to an average of $300,000 more for those who attended preschool, García said.

There was societal benefit too from this increased labor market participation, according to the economists. Both the greater parental employment and then later individual employment of the adult who had received quality preschool services meant less tax dollars spent on welfare benefits.

The researchers also found taxpayers saved money due to less crime committed by the group who had quality preschool compared to the control group. And there were better health outcomes throughout life, especially for the male preschoolers, compared to the control group. These included less drug use and lower blood pressure.

For girls who attended the high-quality preschool, the study found increased high school graduation results, more years of education and more years of adult employment.

While the longitudinal data comes from studies when the children were in preschool in the 1970s, Garcia said they looked specifically at the components of the program that made it a quality program and found those to be equivalent to quality preschool programs today.

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