How would we expect pre-k benefits to vary with family income?

Based on what we know about child development and labor markets, how would we expect pre-k’s effects on the earnings of former child participants as adults to vary with the income of the child’s family?  Subsequent posts will review more direct evidence on this topic, but this evidence is more limited than we might like, so it is important to consider what we would reasonably expect.

Perhaps the best argument that pre-k will have considerably less effects on children from upper-income families is the argument that such families are already, on average,  in a position where their children are likely to do well without preschool. This argument has been most powerfully made by Nobel prize-winning economist James Heckman:

“I think the evidence is very strong that family background is a major predictor of future behavior of children. So a disproportionate number of problem kids come from disadvantaged families. The simple economics of intervention therefore suggests that society should focus its investment where it’s likely to have very high returns. Right now, that is the disadvantaged population…Functioning middle-class homes are producing healthy, productive kids…It is foolish to try to substitute for what the middle-class and upper-class parents are already doing.”

However, as noted in a previous post, one thing that many upper-class parents are already doing is enrolling their kids in preschool, and in some cases paying a lot of money for preschool. Therefore, apparently many such parents believe that a quality pre-k program can provide some advantages for their child, beyond what their children are already getting from their family and social environment.

Such advantages might include helping kids acquire the “soft skills” of dealing with peers and authority figures. Parents may have more challenges in providing such skills on their own, regardless of income.  Preschool may also provide some explicit instruction in hard skills that may be helpful.

In addition, it seems reasonable that there is no definitive dividing line between disadvantaged kids who have great benefits from preschool, and advantaged kids who have zero benefits from preschool.  Steve Barnett has presented evidence that the “soft skills” and “hard skills” of entering kindergartners vary smoothly with the child’s family income.  Low income kids are significantly behind middle class kids in both soft skills and hard skills. But middle income kids in turn are significantly behind upper income kids in both soft skills and hard skills. The gap between middle income and upper income kids in “kindergarten readiness” is as big as the gap between lower income and middle income kids in kindergarten readiness.

It should also be noted that the absolute dollar gains in adulthood from increasing educational attainment and other skills may be greater for children whose baseline expectations for adult education and earnings were higher.  For example, the annual earnings boost from attaining a four-year college degree, versus having only a high school degree, is $19,400, as this increases annual earnings from $31,500 to $50,900. In contrast, the annual earnings boost from attaining a high school degree but no higher degree, versus being a high school dropout, is only $8,100, increasing earnings from $23,400 to $31,500.  For some people, preschool participation may reduce dropout rates, but not boost college attendance. For other people, who would have graduated from high school even without preschool, preschool participation may boost college graduation.  The absolute dollar value of earnings gains is greater for any preschool effects on boosting college graduation than on boosting high school graduation.

The point is that if pre-k causes even quite small changes in college graduation rates for children from middle income and upper income families, such improvements could be large in dollar effects on their earnings as adults. Of course, preschool may also boost college graduation rates for children from lower income families, but it may be that this group has more effects through reducing dropout rates.

In sum, children from disadvantaged families face greater challenges(on average – everyone is different!), and there are potentially great gains to offsetting some of those challenges with high-quality pre-k. But children from middle class and upper-class families do not in all cases develop to their full potential, and high-quality pre-k therefore has room to be helpful for this group as well. Some of the adult earnings gains from higher educational and occupational attainment can be large for middle and upper income groups.

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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One Response to How would we expect pre-k benefits to vary with family income?

  1. Pingback: Universal pre-k: effects on income distribution | investinginkids

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