The pros and cons of federal involvement in early childhood programs

An earlier post compared the state perspective on early childhood programs with the national perspective. National economic development benefits of early childhood programs considerably exceed state benefits. This conclusion applies to three types of early childhood programs: high-quality universal pre-k; full-time child care and preschool programs similar to the Educare program sponsored by the Ounce of Prevention Fund and the Buffett Early Childhood Fund; the Nurse Family Partnership.

If a state invests in early childhood programs, how large are the benefits that occur outside the state? Such “external benefits” are large enough to rationalize considerable federal subsidies. These federal subsidies would be over 100% of the costs for universal pre-k. External benefits are sufficient to rationalize federal subsidies of over 75% of costs for Educare-style programs. External benefits are sufficient to rationalize federal subsidies of over 60% of costs for the Nurse Family Partnership.

On the other hand, the “own-state” benefits from these programs are sufficient that states have plenty of incentive to invest in these programs with their own dollars, without any federal subsidy. The ratio of state economic development benefits to costs is 2.78 for universal pre-k. The ratio of own-state benefits to costs is 2.25 for Educare-style programs. The ratio of own-state benefits to costs is 1.85 for the Nurse Family Partnership.

At some point, perhaps investment in early childhood programs will be so extensive that we will reach diminishing returns.  At that point, further investments may make sense from a national perspective, but not a state perspective. Federal subsidies would be clearly necessary to ensure adequate investment. At present, however, we are so short of needed investment levels in early childhood programs that the programs have large pay-offs even when we ignore the benefits for those who participate in early childhood programs in one state, but end up spending their working career in some other state.

So, extensive federal subsidies to early childhood programs make sense from a “policy wonk” perspective, but logically should not be needed to rationalize state investment in early childhood programs. Are there any negative features of federal involvement in early childhood programs that might be of concern? One concern might be that federal involvement could inhibit needed flexibility and improvement. Although we know some things about what makes for good early childhood programs, in terms of appropriate class size, curriculum, and teacher training, there is much that we do not know. There are benefits to experimenting with a wide variety of approaches. It is reasonable to be concerned that a dominant federal role might inhibit some innovative state and local early childhood programs.

One possibility is to circumscribe the federal role so that it focuses only on limited areas. A circumscribed federal role is less likely to inhibit state and local innovation.

A federal role in a particular area of early childhood programs makes the most sense when national benefits are likely to be particularly large relative to state benefits. One such area is evaluation. Early childhood programs throughout the nation benefit when we obtain better information on what program designs work better to improve student skills.  High-quality evaluation can be expensive, which discourages adequate investment in evaluation by states acting on their own. In addition, some state and local government agencies may be hesitant to do rigorous evaluations of their own early childhood programs, out of fear that the results may be negative. Federal financing and standards for high-quality early childhood evaluation may be helpful.

Such evaluation should include both “hard skills” (e.g., what is measured by literacy and math tests) and “soft skills” (e.g., social skills). A variety of rigorous methods are available for evaluating early childhood programs. For example, a recent publication by the National Institute for Early Education Research provides a useful guide to potential evaluation methods for early childhood programs.

A federal role may also be useful in establishing standards and helping finance staff education and staff training for early childhood programs. There would be national benefits for having more uniform credentials and standards for early childhood staff. (A recent paper on teacher preparation for pre-k has been published by the New America Foundation.)

Finally, one possible circumscribed federal role might be to pay for infrastructure costs for new or rehabilitated early childhood program facilities. Such infrastructure costs, annualized over the lifespan of the facility, might be about 10% of total early childhood program costs, based on data from the Institute from Women’s Policy Research (Report number G718, “Meaningful Investments in Pre-K: Estimating the Per-Child Costs of Quality Programs”.)

Federal support for evaluation, staff education and training, and building infrastructure would help financially support early childhood programs while also encouraging improvement in program quality. However, because such support would avoid direct operating support, such federal support is less likely to inhibit needed program innovation. In fact, the support for evaluation would help ensure that the true effects of any innovation were measured. It is common to praise state and local governments as being “laboratories of democracy”. But if no one measures the results of such laboratories, such state and local experimentation does not lead to long-lasting program learning and improvements.

A more detailed discussion of possible federal roles in early childhood programs is in chapter 10 of Investing in Kids.

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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