Early childhood programs and income distribution: some points of agreement

In this post, and subsequent posts, I will consider how early childhood programs affect the earnings of different income groups. As part of this discussion, I will also consider the politically contentious issue of whether expanded pre-K programs should be targeted at disadvantaged groups, or be more universally accessible. Both of these issues are discussed in chapter 8 of my book Investing in Kids.

In this initial post on this topic, I want to focus on some things that most researchers agree on about the distributional effects of early childhood programs, and the tradeoff between targeted and universal programs.

First, it is generally agreed that early childhood programs, including preschool, probably have higher returns for disadvantaged groups than for middle-income and upper-income groups.  For example, Steve Barnett, codirector of the National Institute for Early Education Research, and an advocate of universal pre-K, admits that “the weight of the evidence seems to indicate that effects [of pre-K] are somewhat smaller for children who are not economically disadvantaged.”

For early childhood programs such as the Nurse Family Partnership, there is strong evidence from randomized experiments that the effects of the program are stronger for disadvantaged families than for other families.

Second, early childhood programs almost certainly have more progressive effects on different income groups than is true for business incentives. As mentioned in a previous post, the dollar effects of business incentives on the earnings of different income groups tend to decline with household income.  Percentage effects of business incentives on the lowest income households are higher, but only because this group has such low baseline average income.  The lowest income group simply has too low wages and skills to take full advantage of the extra employment opportunities provided by general employment growth.

I don’t know of anyone claiming that the dollar effects on adult earnings of early childhood programs will go UP with average household income. Rather, we expect that early childhood programs have dollar effects on earnings that tend to be higher in absolute dollars for lower income households.  With higher absolute dollar effects for lower income households, the percentage effects on lower income households will be considerably greater. This means that early childhood programs will have more progressive effects than business incentives.

Third, the issue of targeted vs. universal early childhood programs is largely an issue only for preschool. There is general agreement that many early childhood services that are more expensive per child than preschool should be targeted at more disadvantaged groups.

As mentioned, the Nurse Family Partnership is designed to provide services to disadvantaged first-time mothers and their children. The research evidence suggests that this targeting makes sense for this program.

Consider programs such as the Abecedarian program, which provided full-time child care and preschool from birth to age five for disadvantaged children.  Such a program’s gross costs over five years per child are almost $80,000. The Abecedarian program is similar to the Educare schools sponsored by the Ounce of Prevention Fund and the Buffett Early Childhood Fund. As far as I know, no one is suggesting that such an expensive and intensive intervention should be contemplated except for disadvantaged children.  Even if this were suggested, a more universal Abecedarian program would be enormously expensive and almost certainly politically impossible.

Therefore, the targeted versus universal early childhood program issue is largely an issue for interventions of more modest cost and intensity, such as a half-day preschool program for 4-year-olds.  The issue is whether the additional access and preschool quality created by universal pre-k, versus a program more targeted on the disadvantaged, is worth the additional costs. This requires an analysis of both economic and political benefits and costs.  This analysis depends in part on how we think that the effects on adult earnings of pre-k programs vary for different income groups. I will discuss these issues in subsequent posts.

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.
This entry was posted in Distribution of benefits, Early childhood programs. Bookmark the permalink.