In an earlier post, I quoted Harvard professor John Donahue as saying that devolving a policy area to the states makes sense if “competition boosts efficiency instead of inspiring destructive strategies”. Does competition among the states in early childhood education boost efficiency? Or does it inspire destructive strategies?

My answer, in brief, is that competition, with some federal regulation to improve parent information, can boost efficiency. Without such federal regulation, the benefits of competition are more questionable.

We know that parents are increasingly valuing early childhood education. Higher-quality preschool programs can make it easier for employers to attract parents to move to a state. Higher-quality preschool can boost local property values by many times their costs.

However, this competitive process is more efficient if parents actually have some information on the relative quality of different states’ preschool programs. If parents know what programs are of better quality, they will be more attracted to the states with high-quality programs. This will put competitive pressure on states to offer high-quality programs.

This will require some federal effort to have similar evaluations of different states’ preschool programs. Such evaluations can be done rigorously by comparing student scores on different test measures at the beginning of preschool and at the beginning of kindergarten.  These measures can include both hard skills and soft skills.

A common argument for competition among states is that it allows states to be “laboratories of democracy”.  The state that is a good laboratory will be rewarded by being more attractive to businesses and households. But for this laboratory model of competition to work, someone needs to make sure that we have good data comparing these different state laboratories.