In a recent post on community colleges, I made the off-hand remark that “early childhood programs also affect adult earnings by increasing employment rates and wage rates even for individuals at the same level of educational attainment”. What is the evidence for this assertion, and why is it important?

The evidence comes from some of the more important studies of preschool and child care programs. For example, the Perry Preschool program is estimated to increase the employment rate of former participants, compared to the control group, by 14 percent at age 40. However, the Perry program’s effects on educational attainment predict that the employment rate will only increase by 2 percent. Presumably, these “extra employment rate” effects are due to better and more-job-relevant skills that are not reflected in higher educational attainment.  Similar results occur for former child participants in the Abecedarian program, which provided full-time child care and preschool from birth to age five.

These “extra employment rate” effects are important because they reflect additional benefits of early childhood programs. Frequently, benefit-cost analyses of early childhood programs base their projections of the future earnings effects of a program by the program’s effects on educational attainment. If these “extra employment rate” effects persist, then many benefit-cost analyses of early childhood programs will tend to understate program benefits.  In my book, Investing in Kids,   these extra employment rate effects are included.

Such extra employment rate effects are consistent with the notion that some of the important effects of early childhood programs are due to effects on “soft skills”. Soft skills of being able to get along with co-workers, supervisors, and customers, and reliably showing up at work on time, should affect a person’s employability and wages even if their educational attainment does not increase.