Special education cost savings

Posted on May 22, 2012 by

A recent report released by ReadyNation, prepared with support from the Kauffman Foundation, provides much research information on how special education cost-savings might be used to fund high-quality pre-K. The report, written by Rob Dugger and Bob Litan, argues that some recent estimates of special education cost savings suggest that these cost savings may be sufficient to fully fund high-quality pre-K. In particular, this report points to the results for the Pennsylvania Pre-K Counts study, which found that this program was associated with a decline in the rate of special education assignment from 18 percent to 2.4 percent.

A great deal of the report explores what the implications of these findings are for financing pre-K programs with a combination of some state government assistance, some program-related investments by private philanthropies, and some bond financing by private investors. The specifics of the resulting cash flows depend upon the assumptions made, but under many combinations of assumptions, it is certainly possible for pre-K to generate positive cash flows in the long-run, if the special education cost savings are large enough.

While I think the financing discussion of the report is important, for some readers it might obscure the larger point: pre-K can generate significant cost savings that can be used to finance a large part or perhaps all of its costs. This is true regardless of who provides the initial financing.  Private investors can provide the financing, as the report discusses. But if this option is infeasible or unattractive for whatever reason, financing could potentially be provided by school districts, state governments, and private foundations.

In other words, a school district could decide to begin a pre-K program at a small scale. The district could compare the experience of pre-K students with similar students at schools not offering the expanded program, and monitor the cost savings over time. Cost-savings could be plowed back into sustaining and possibly expanding the program.

Similarly, a private foundation might offer a grant to a school district to invest in an expanded pre-K program for some number of years.  In return, the school district could agree with the foundation on some procedure to estimate cost savings, and agree to put these cost savings back into sustaining or expanding that program over time.

This is an area where a great deal of local experimentation would be helpful. We need to better estimate what these costs savings are over time, and explore a variety of mechanisms of possibly using such cost savings to finance pre-K.  While there is good evidence that high-quality pre-K reduces special education assignments, we know less that we would like about the exact magnitude and timing of such cost-savings. We also have less evidence than we would like on the cost savings for other remedial programs, for example savings in summer school and tutoring programs.

If we can estimate and document specific, large savings in the costs of various remedial programs due to pre-K programs, there will be many options for making the needed investments to realize these cost savings.

Posted in Early childhood program design issues, Early childhood programs, Timing of benefits | Leave a comment

Different views of “investing in Julia”

Posted on May 21, 2012 by

Nancy Folbre, an economist at the University of Massachusetts-Amherst, has a good on-line column at the New York Times on the recent controversy over the Obama campaign’s online ad about an imaginary woman named Julia. The Obama ad tried to argue that the Obama Administration’s policies would be more helpful to this particular person’s life course than would be true for a Romney Administration.  The ad highlighted various government assistance programs such as Head Start, public education, financial aid for college, health care reform, small business assistance, Social Security, and Medicare.

The ad in turn led to some strong attacks  from various conservative commentators. William Bennett, for example, formerly Secretary of Education under President Reagan, argued that:

“Julia’s entire life is defined by her interactions with the state. Government is everywhere and each step of her life is tied to a government program. Notably absent in her story is any relationship with a husband, family, church or community, except a “community” garden where she works post-retirement. Instead, the state has taken their place and is her primary relationship.”

But I think it is fair to say that many of these comments distort the nature of this imaginary Julia’s relationship to government.  As Nancy Folbre points out, if preschool, K-12 education, and college student aid are working effectively, they lead to an adult who has more skills and productivity. As an adult, this more productive person will be less dependent on government welfare and other assistance. With higher skills, “Julia” will be more able to choose from a variety of better-paying jobs, which is an important dimension of human freedom.

This higher productivity benefits not only “Julia”, but the broader American community. If these programs work well, they provide fiscal benefits for the community in higher tax revenues from Julia’s higher tax payments and lower receipt of social assistance. Julia’s higher skills not only increase her wages, but also encourage more productive business growth that will benefit the wages of other workers.

We could equally well argue that government is pervasive even if one’s vision is that government should only provide national defense, police protection, and a court system enforcing the rule of law.  Even in such a limited vision of government’s role, everywhere one goes, the rule of law is pervasive, with traffic lights, a police car that you pass, and the courthouse in the town square.  The relevant question is, does this greater rule of law on net enhance human freedom and capabilities, or detract from it?

We can certainly raise legitimate issues about whether a particular investment in human capital works as effectively as it should, or provides sufficient flexibility to respect human freedom. For example certainly it is legitimate to debate how to make Head Start more effective and more flexible to address child developmental needs. We can also debate the degree to which there should be federal versus local control over the design of early childhood programs.

However, if a human capital investment program works, in the sense of effectively increasing a person’s adult life capabilities beyond what they would be otherwise, it seems a strange view to argue that this time-limited intervention is a government restriction on freedom.

Human freedom is not synonymous with zero government. Rather, greater human freedom requires a government that is smart, flexible, democratically controlled, and targeted at where its intervention can effectively expand human capabilities.

Posted in Economic development, National vs. state vs. local | Leave a comment

Universal pre-K and the Presidential campaign

Posted on May 1, 2012 by

Prominent bloggers Kevin Drum and Matt Yglesias have both linked to Dana Goldstein’s brief blog post suggesting that universal pre-K be a key issue in the Presidential campaign.

Dana Goldstein advocates for high-quality universal pre-K and child care for all 3-year-olds and 4-year-olds. Although she doesn’t provide a price tag for her proposal, I estimate that a full-day school-year program that was available for free to all 3-year-olds and 4-year-olds would probably have a net budgetary cost of at least $60 billion annually. The exact amount would depend upon assumptions about take-up rates, student-teacher ratios, and teacher salaries.

Ms. Goldstein’s argument, which is similar to arguments made in this blog, and by many others, is that universal pre-K would:  develop both academic skills and social skills of many children; increase these children’s future educational attainment and adult skills; provide needed child care for parents; and create hundreds of thousands of jobs for teachers and other staff for these pre-K programs.

Matt Yglesias’s blog post agrees that universal pre-K is a good idea, but argues that it won’t happen. Why? There is no public appetite for higher federal taxes, even for worthy programs, and there are looming federal deficits and financial commitments to programs such as Medicare and Medicaid.

Kevin Drum also agrees that universal pre-K is a good idea, but wants to extend the argument to other early childhood programs, such as nurse home visitation programs and child care at earlier ages. Drum also particularly stresses the importance of these programs’ effects on “non-cognitive skills”, sometimes called “soft skills”, and sometimes called “social skills”.  Drum argues that if we can’t get more revenue, we should be willing to take $100 billion out of K-12 and redirect these funds to early childhood programs.

My reaction to these arguments is that a large-scale, effectively-run federal commitment to universal pre-K is unlikely in at least the short-run and medium-run. I agree with Yglesias that the federal government has a lot else on its plate. Also, with federal funding, it is very hard to get the public to understand the link between the taxes they pay and the benefits they receive. Systems of federal funding under which general tax revenue then is redistributed via states and local governments to local programs tend to become so convoluted that no one understands how they work except policy wonks.  This undermines public support for the programs and for the needed taxation to support these programs, which leads to programs being under-funded.

As for Drum’s argument, I think trying to fund early childhood programs by cutting K-12 is political suicide. To develop political support for early childhood programs, we need to build a broad coalition for programs that will increase labor skills. K-12 is a natural part of that coalition.

What then, can be done? First, at the federal level, we can have a smart, more targeted intervention to support early childhood programs. For example, we could have a federal commitment to provide flexible block grants to states for the following purposes:

  • Capital costs for new preschool centers;
  • Transportation costs for access to preschool;
  • Costs of developing and purchasing pre-K curriculum materials;
  • Teacher training costs;
  • Technical assistance and evaluation based on classroom process evaluations to improve the quality of pre-K programs;
  • A variety of costs related to evaluation of effects of pre-K programs on students, including paying for student assessments and paying for evaluations.

It would still be up to state and local governments and school districts to figure out how to come up with the operating costs for these programs. This would require state and local leaders to build community support for these programs, and explain how increases in state and local taxes would be linked to providing the public with the benefits from expanding these programs.  I think developing such public support would help build long-run sustainability of such programs.

However, if $5 billion annually in flexible federal grants were provided to states for the above purposes, which pay for some of the infrastructure costs, training costs, and evaluation costs of high-quality programs, this would not only help pay for these programs, but encourage the resulting programs to be higher quality.  The federal government would be focused on encouraging higher quality programs, and higher quality evaluations, which is an appropriate federal role, as better information on what works and what doesn’t work has national benefits.

Such a program has some resemblance to the Race to the Top Early Learning Challenge, but would differ in several respects. First, I think for such a program to be successful, it has to be on a much larger scale than is true for RTT-ELC. Second, I would urge that such a program be more focused specifically on training, development, and evaluation of pre-K programs than is true for RTT-ELC. Finally, I think such a program should be designed as an ongoing commitment for at least a ten-year period.

Second, what if even such a limited federal commitment is politically infeasible? Then I think we go back to the state and local case for universal pre-K. State and local governments have good reasons to do universal pre-K using local resources, without federal funding. These programs pay off for the state and local areas that fund them.  More extensive access to higher-quality pre-K not only benefits the participants in these programs, but also has broad local benefits. The entire local economy benefits from higher skills of former child participants in these programs, which helps attract more and better jobs to the local economy. Furthermore, state and local governments benefit from the higher taxes due to higher earnings per capita, as well as reduced need for spending on special education, the criminal justice system, and welfare programs.

Massive federal spending is not a necessary condition for high-quality universal pre-K.  Given that massive federal spending on universal pre-K is politically unlikely, we need to figure out other ways to get to the goal of universal access to high-quality pre-K programs. Smart but limited federal intervention can help, as can state and local initiatives.

Posted in Early childhood program design issues, Early childhood programs, National vs. state vs. local

Improving evaluation of economic development programs

Posted on April 30, 2012 by

The Pew Center on the States recently released a major study analyzing the strengths and weaknesses of what states are currently doing to assess their tax incentives for economic development. (I should disclose that I reviewed an advance copy of this report, and made some comments on that draft.)

As the Pew study reveals, many state governments do not do a good job of evaluating their business tax incentives for economic development. Some states do not have good measures of the resources devoted to these programs. Other states do not have good studies measuring how these tax incentives are distributed to different types of businesses. Finally, many states do not do a good of providing reasonable estimates of the effectiveness of business tax incentives in achieving their economic development goals.

On the other hand, there are states that provide good models of how to evaluating business tax incentives for economic development.  Certainly we should have a governmental budget accounting system that accounts for the true costs of these programs. We should also demand an information system that collects the needed data on how these programs’ tax benefits are distributed.

Although evaluation of effectiveness is difficult, it can be done.  As I pointed out in my book “Investing in Kids”, we know something about what types of businesses are most affected by business tax incentives. For example, we know that business tax incentives are far more effective when provided to businesses that are what regional economists call “export-base” businesses, which means businesses that sell their goods and services to customers outside the state.  For industries whose main customers are inside the state, total industrial activity will be driven by total state demand, not by business tax incentives. Tax incentives to such non-export-base businesses will largely be wasted.

We also know that business tax incentives are far more effective when targeted at high-wage businesses with strong local supplier networks. Regional econometric models can be used to assess the multiplier effects of such businesses.

We also have some reasonable estimates of the likely moderate responses of export-base businesses to the cost reductions brought about by business tax incentives.  Even without new econometric evidence on a state’s business tax incentives, this previous tax research literature can be used to evaluate effects.  I have done such simulation exercises in several previous papers, including one on incentives in general, and the other on Michigan’s MEGA program.

Finally, we know that any evaluation of business tax incentives must take account of the financing of such incentives.  Business tax incentives in almost all cases are likely to be a net fiscal cost for a state’s budget. This cost must be financed by increases in other taxes or cuts in spending. Such tax increases or spending cuts will almost certainly have negative economic effects, through effects on both demand for goods and services, and effects on the supply of labor and capital to the state economy.

If we had better evaluation of business tax incentives, and if this better evaluation led to needed program reforms, this would lead to the elimination of some inefficient business tax incentive programs. Such elimination of inefficient programs would free up resources that could be used for other purposes, including early childhood programs.

I don’t think advocates for early childhood programs, or other investments in skills development, should take the position that all business tax incentives are bad. This position is inconsistent with the evidence, and makes it more difficult to link up skills development programs with a positive message for stronger state economic development.

But I do think that advocates for early childhood programs, along with advocates for better and more efficient government, should be asking that all state government programs be rigorously evaluated, including tax incentives as well as early childhood programs. Those programs that show strong evidence of effectiveness should be expanded. Those programs that are ineffective should be reformed. In such a merit-based competition for public resources, I think it likely that early childhood programs would do well.

Posted in Business incentives, Economic development, Incentive design issues

Making the case for pre-K: some fiscal and economic arithmetic

Posted on April 6, 2012 by

Andrew Rotherham has an April 5th Time magazine column with the ominous title, “Are Pre-K Programs About To Get Gutted?” Mr. Rotherham apparently has access to an advance copy of the forthcoming annual report on state preschool programs from the National Institute for Early Education Research, which is to be released on Tuesday, April 10. Mr. Rotherham reports that “Roughly two-thirds of the 39 states with early-childhood education programs cut spending in 2011…[M]any states are planning on additional cutbacks in the next several years.”

What political arguments can reverse this adverse trend in state support for pre-K programs?  I think we need to continue with the argument that investment in high-quality early childhood programs is an essential part of state economic development strategy. If a state wants to be positioned to have good growth in earnings per capita, it needs to improve its business climate for more and better jobs in two ways:  by an attractive business tax and services climate; by developing a high-quality labor force. Early childhood programs are one of the most research-proven ways of developing a high-quality labor force.  We are making slow progress with this economic development argument. In the long-run, I believe this argument can be politically decisive.

However, we also need some short-run arguments. People want to know what early childhood programs can do today. And there is concern among some groups about government debt and spending that must be addressed.  I think we need to show how early childhood programs can address our current economic crisis, as well as our long-run debt problems.

The most recent Bureau of Labor Statistics report on national employment trends showed disappointing employment growth in March of 2012. Nonfarm payroll employment rose by only 120,000 jobs. This is only a little bit ahead of the 90,000 extra jobs per month needed to keep pace with our growing population.

We’ve done a little better over the last year, with non-farm payroll employment growing by about 1.9 million from March of 2011 to March of 2012, a little over 150,000 jobs per month. Still, under any reasonable projection, if we don’t see a large-scale acceleration of job growth, we can expect to see high unemployment and low employment to population ratios in the U.S. until at least 2020 and perhaps much later.

A part of this sluggish jobs growth is that government employment, and particularly state and local government employment, has been going in the wrong direction. Over the past year, there has been a gain of 2.1 million in private sector jobs.  Government jobs have shrunk by 200,000 jobs. Of that shrinkage, over 100,000 has been in reduced local government jobs.

What can early childhood programs do to help these jobs trends in the short-run? Well, suppose we moved to universal pre-K education.  What would that do for jobs in the short-run?

In my book Investing in Kids , I estimate that moving to a high-quality universal pre-K program, for 4-year olds only, and only for a  half-day during the school year, would have net costs of $14.3 billion annually. Obviously we could also spend more, for a program that would include 3 year olds, or for a program that was full-day.

In the research that led up to my book, I estimated that spending $14.3 billion on universal pre-K would on net create 80,000 jobs, even if it was entirely tax financed (see my 2006 report, p. 37).  Therefore, even if we increased taxes to pay for universal pre-K, such a program, by itself, would essentially make up for the reduction in local government jobs that has occurred over the last year.

If universal pre-K spending was deficit-financed in the short-run, its short-run job creation effects would be much higher. If we used some plausible multipliers for deficit-financed increases in government services, we would get job creation of at least 150,000 jobs from spending $14.3 billion on universal pre-K. If we allowed for early childhood programs having somewhat lower wages and being more labor intensive, universal pre-K might increase short-run job creation as much as 250,000 jobs.

(The first calculation of 150,000 jobs divides the $14.3 billion by an estimated $92,000 cost per job created for deficit-financed government purchases. The second calculation of 250,000 jobs multiplies the 80,000 in job creation from tax-financed universal pre-K by the ratio of public services job creation to net job creation from econometric studies of balanced budget tax and spending changes in state economies. Such studies suggest that increased taxes offset about two-thirds of the direct job creation effects of more government spending on services, so the job-creation effects when no taxes are raised will be about three times the effects of a balanced budget increase in spending on pre-K.)

Therefore, if the federal government or state governments were willing to run budget deficits to finance universal pre-K, we could over the next year or so create up to 250,000 jobs in the U.S. economy.  This would help to significantly speed up our economic recovery.

But what about the debt burden from deficit-financed universal pre-K? In the short-run, the increased debt is not a huge burden given low real interest rates and the sluggish state of our economy.  In the long-run, high-quality universal pre-K would provide fiscal benefits that would imply that such a program would be essentially self-financing in the long-run.

For example, we know from the research of Art Reynolds and his colleagues that pre-K programs targeted on the disadvantaged would clearly have a present value of fiscal benefits that significantly exceeds costs. In the most recent benefit-cost analysis of the Chicago Child-Parent Center program, Reynolds and his colleagues finds that for each dollar invested in these programs, the present value of future fiscal benefits is conservatively estimated at $2.80. This $2.80 fiscal benefit per dollar of program costs can be broken down as follows:  62 cents in lower special education costs, 75 cents in higher tax receipts, $1.06 in lower fiscal costs for the criminal justice system, and 36 cents in lower child welfare system costs.

Of course, a universal pre-K program probably wouldn’t get quite so high a benefit per dollar of investment. However, as shown in my work with William Gormley and Shirley Adelstein on Tulsa’s pre-K program, the evidence suggests that the future earnings benefits of universal pre-K are of similar magnitude for middle-class households vs. lower-income households.  These middle-class households might pay somewhat higher tax rates.  Therefore, I think it conservative to say that a universal program might increase the present value of future tax receipts, due to higher earnings, by 90% of the 75 cents per dollar estimated by Reynolds et al., or  67 cents.

As for the other $2.05 in fiscal benefits per dollar estimated by Reynolds et al., it seems a quite conservative assumption that a universal program would provide at least 20% as high benefits per dollar invested, or 41 cents.  Given the 21% of all American children are below the poverty line, this assumption seems warranted even if one assumes that pre-K for middle-class children has no benefits in lowering special education costs, lowering crime rates, or lowering child welfare system costs.  A universal program would get such benefits from the low-income children it serves.

As a result, a conservative estimate is that a universal pre-K program would provide future fiscal benefits whose present value is at least $1.08 (=67 cents in higher future taxes plus 41 cents in other future fiscal benefits). As a result, spending an additional $14.3 billion on a universal pre-K program would provide future fiscal benefits with a present value of $15.4 billion. Our long-run “debt burden” would actually go down by $1.1 billion.

Furthermore, in the current economic situation, this doesn’t even count the long-run economic benefits of job-creation. Creating jobs lowers long-term unemployment. Long-term unemployment erodes workers’ job skills, self-confidence, and reputation with employers. All these effects end up lowering some workers’ long-run employability and wages.  As argued recently by Delong and Summers, in a severe recession, it is possible that the boost to long-run economic activity from lowering long-term unemployment may be sufficient that deficit-financed increases in government spending can be self-financing.

In sum, why should state governments, rather than cutting pre-K, actually consider expanding pre-K to universal scale, despite the still troubled fiscal situation? Why should the federal government consider deficit-financed support for moving to universal pre-K? The argument is that in the short-run, universal pre-K can create hundreds of thousands of jobs, which will give a needed boost to the economic recovery. And in the long-run, such an initiative is likely to be self-financing, due both to the economic and social benefits of pre-K, and the economic benefits of lowering long-term unemployment.

Posted in Distribution of benefits, Early childhood programs, Economic development, National vs. state vs. local, Timing of benefits

Preschool is a cost-effective way of improving school readiness that can be implemented on a large scale

Posted on March 20, 2012 by

Julia Isaacs of the Brookings Institution has a just-released paper (March 19, 2012) that provides valuable comparisons of preschool versus other methods of increasing school readiness, at kindergarten entrance, for children from low-income families.

The backdrop to this paper is the finding, based on a previous paper by  Isaacs and University of Wisconsin Professor Katherine Magnuson,  that the “school readiness gap” between children from families below the poverty line, versus families with incomes above 185% of the poverty line (the cutoff in American schools for eligibility for a subsidized school lunch), is 27 percentage points. Children from poverty families have a school readiness percentage at kindergarten entrance of 48%, versus 75% for children from families above 185% of the poverty line.

Isaacs in this paper, and in the preceding paper with Magnuson, looks at how school readiness at kindergarten entrance is related to preschool attendance, as well as other variables such as maternal smoking, and family income. In the current paper, Isaacs uses these estimates, along with estimates of program costs and program effectiveness, to estimate the effectiveness of various interventions to improve school readiness. She asks two useful questions about effectiveness:

(1)    How effective in raising school readiness is the program or intervention per dollar of program cost?

(2)    Given what we know about how many children can reasonably be expected to be affected by this intervention when expanded to full scale, how large an effect might the intervention be expected to have in reducing the school readiness gap for all poor children?

Isaacs makes the following two conservative assumptions about the effectiveness and plausible scale of the preschool program.

(1)    She assumes that a preschool program will need to cost $7,200 to raise kindergarten readiness by about 9%, which is about one-third of the total gap between low-income and moderate income children in school readiness.

(2)    She assumes that the scale of her assumed preschool program is limited to increasing preschool enrollment among low-income children from current levels to 66% to enrollment levels of 90%.

The first assumption is conservative because there are studies that estimate that cheaper preschool programs than assumed by Isaacs can raise school readiness by about the same amount as Isaacs assumes, and that slightly more expensive preschool programs can raise kindergarten readiness by twice as much.  For example, in my recent study with Bill Gormley and Shirley Adelstein of Tulsa’s universal pre-K program, we found that a half-day pre-K program for 4-year olds that cost about $4500 per child could raise the test score percentiles of children from poor families by about 12 percentiles, which implies that it would probably raise kindergarten readiness by close to that amount.  A full-day pre-K program that cost about $9,000 per child could raise test score percentiles by 18 percentiles, which would imply a similar increase in kindergarten readiness.

The second assumption about scale of pre-K reform is conservative because it assumes that the only impact of moving to universal pre-K is to increase pre-K access for children from poor families from 66% to 90%. But instituting universal pre-K for all low-income children would probably also improve the quality of pre-K for the 66% who are already in some type of program that is called preschool.

Even with these two conservative assumptions, she gets the result that moving to universal pre-K for poor children would have the potential for improving school readiness of ALL poor children by 2.1% (e.g., a 9% improvement for the 24% of children who are newly added to preschool).  This policy intervention would close one-tenth of the school readiness gap between poor children and moderate income children, at a nationwide cost of only $1.6 billion. This is quite a powerful effect for such a relatively cheap intervention. And I think it would be easily possible with other defensible assumptions to get effects on school readiness of 3 or 4 times as much for a program of scale expansion and quality improvement that might cost between $2 and $3 billion nationwide. Both cost-effectiveness and potential scale of preschool reform may significantly exceed Isaacs’s estimates.

Even with these conservative assumptions, preschool compares quite favorably with other interventions when judged by its effects on school readiness at kindergarten entrance. This shouldn’t be a big shock, as kindergarten readiness is one of the key outcomes that high-quality preschool should be designed to significantly affect.

For example, smoking cessation programs for low-income mothers have a similar cost-effectiveness to preschool in raising school readiness, because these programs are so cheap per mother treated. But these programs have only one-20th the potential overall effect on school readiness for low-income children when expanded to full scale, primarily because (1) only 20% of low-income mothers smoke, and (2) smoking cessation programs only reduce smoking rates by 6% of those treated, both of which factors limit the potential scale of aggregate effects of these programs.

Nurse home visiting programs for disadvantaged first-time mothers also improve school readiness. However, nurse home visitation is about twice as expensive per a given improvement in school readiness as preschool, and only has about one-fourth the potential scale in its aggregate effects on school readiness. This is primarily because nurse home visitation programs have broader goals than school readiness for children, because such programs are limited in their coverage to first-time mothers, and because these programs show the greatest effects for the low-income mothers at highest risk.

Finally, we can improve school readiness by simply giving low-income families more money.  While income transfers may have many broad social benefits for low-income families, Isaacs’s estimates imply that such income transfers would have a cost, for a given increase in school readiness, of about 10 times the cost of achieving the same school readiness gains by expanded preschool.  Again, this should be no surprise: simply providing income transfers is not as targeted in its benefits for children in terms of school readiness as is true of providing preschool.

Therefore, Isaacs’s estimates, which are consistent with other estimates, suggest that moving to universal preschool for poor children is a cost-effective way of improving their school readiness that can be expanded to have sizable aggregate effects.

But is school readiness important? My prior paper with Gormley and Adelstein, which is based in turn on prior work by Harvard Professor Raj Chetty, suggests that how students are doing as of kindergarten is important to adult outcomes. Improving a child’s kindergarten test scores by 1 percentile is estimated to raise average adult earnings by about one-half of 1%. A 1 percentile increase in a group of children’s test school performance is likely to translate into an increase in kindergarten readiness by a similar amount. Therefore, if we can increase the kindergarten readiness of all poor children by 10% or so, we would be likely to improve their average lifetime incomes by at least 5%. This would be a quite large dollar figure.

In sum, expanding quality preschool to all low-income children can plausibly have substantial effects on improving the U.S. income distribution, as I have argued before.   Furthermore, universal preschool for children from working class and middle class families will also have sizeable effects on the future income of the broad middle of the U.S. income distribution.

Posted in Distribution of benefits, Early childhood programs

Responding to six arguments of skeptics of early childhood programs

Posted on March 9, 2012 by

I recently gave two lengthy presentations on early childhood programs in Grand Haven, Michigan and Newaygo County, Michigan.  My draft speech, which goes for 8 pages, is here. The PowerPoint accompanying this speech is at the link at the bottom of this page, or more directly here.

The presentation is framed as responses to six skeptic questions/concerns raised about early childhood programs:

  1. Why should legislators and other policymakers believe advocates for early childhood programs when advocates claim the research evidence for these programs is convincing?
  2. Are early childhood programs really needed for any except the most disadvantaged kids?
  3. How does preschool help the entire local economy?  Even if it helps former program participants, won’t these former participants as adults just move somewhere else? Even if they stay, how will others in the local economy benefit?
  4. What are the short-term benefits of early childhood programs?
  5. Will preschool and other early childhood programs somehow undermine the role of parents? Wouldn’t it be cheaper to focus on parenting rather than focusing on expensive preschool and childcare programs?
  6. Why should the government take on preschool when we haven’t solved our many challenges with K-12 education? Won’t anything we do in preschool be undermined by problems in K-12?

The presentation provides what I hope are convincing answers to all these questions, with PowerPoint slides providing supporting data.

Posted in Early childhood programs, Timing of benefits