What might early childhood education do for Chicago?

In the New York Times article by James Warren on Professor James Heckman’s ideas on early childhood education, Mr. Warren suggests that Professor Heckman’s ideas “might have benefited mayoral candidates concerned about Chicago’s public schools performance”. Warren goes on to complain that the Chicago mayoral candidates have not offered a real vision about the purpose of a Chicago Public Schools education.

But we might start with a prior question: why should Chicago leaders care about early childhood education? What’s in it for Chicago?

Of course, one could argue that Chicago leaders should support early childhood education because it is in the best interests of the voters’ children. But if all these children will grow up and leave Chicago, this argument may lack force.

My book Investing in Kids argues that enough participants in early childhood programs will stay in Chicago that Chicago will benefit from higher-quality early childhood programs. A higher quality Chicago workforce will attract more and better jobs to the city.

However, this argument lacks immediacy. Perhaps investing in early childhood programs pays off for Chicago’s economy when the kids grow up.  But what does Chicago get out of this investment in the short-term?

In chapter 7 of my book, I argue that there are several short-term benefits of investing in early childhood programs. One of the most important is the resulting short-term increase in property values.

We know from many studies that higher elementary school test scores will be reflected in higher property values. Parents are willing to pay more for a home or apartment if it provides access to higher quality schools, as measured by test scores.

I calculate that simply from the effect of pre-k programs on 3rd grade test scores, each dollar invested in high-quality pre-k will increase property values 12 times as much. This is a benefit to property owners and city tax revenues that does not take 20 years to be realized.

This calculation assumes that parents put no direct value on high-quality pre-k education. They are simply assumed to value the higher test scores that result. But the effects of high-quality pre-k on adult earnings of former child participants are considerably greater than predicted by elementary test scores.

If parents fully understood the effects of high-quality pre-k on future earnings, I calculate that for each dollar invested in high quality pre-k, local property values should go up over 80 times as much. This is sufficient that the resulting increase in local property taxes would fund the pre-k investments.

Therefore, what can we say to Rahm Emanuel, Gery Chico, and the other Chicago mayoral candidates about the economic development benefits of early childhood programs? We can tell them that these investments not only pay off for Chicago in long-run economic development, but also will boost the city’s property values and property tax revenues immediately.

About timbartik

Tim Bartik is a senior economist at the Upjohn Institute for Employment Research, a non-profit and non-partisan research organization in Kalamazoo, Michigan. His research specializes in state and local economic development policies and local labor markets.
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