One implication of my recent paper on Tulsa’s pre-K program is that even modest increases in kindergarten readiness would be predicted to have large future earnings benefits for former participants in pre-K programs. (This paper, co-authored with Bill Gormley and Shirley Adelstein of Georgetown, can be found at the Upjohn Institute website or at the website of the Georgetown Center for Research on Children in the U.S.)
Using research by Chetty et al, we conclude that even a one percentile increase in a child’s test scores at kindergarten entrance is associated with an increase in the present value of the child’s future earnings of around $1500. A one percentile increase in test scores is a slight increase. For example, such an increase would move a child from the median of test scores – half the children below in test scores, half the children above – to the 51st percentile, with test scores that exceed 51% of all children entering kindergarten.
A quality half-day pre-K program for one school year might cost around $4500 (see the research on the cost of preschool quality by the Institute for Women’s Policy Research). Therefore, such a half-day program will have future earnings benefits exceeding costs even if their effect is only to raise kindergarten readiness by 3 percentiles. Other benefits of pre-K programs, such as lower special education costs or lower crime rates, would imply that pre-K programs could have benefits exceeding costs with even lower effects on test scores of kindergarten entrants.
Furthermore, even slight increases in pre-K quality are likely to have benefits exceeding costs. If we can improve the pre-K curriculum or teacher quality sufficiently to increase average test score effects by even one percentile, the overall benefits for an entire pre-K class are enormous. For example, a 1 percentile increase in average test scores for a pre-K class of 15 children is estimated to increase the present value of future earnings benefits by $22,500 (=$1500 times 15 students). This benefit would be sufficient to justify considerable spending on improving teacher or curriculum quality, even if that spending only has modest effects in improving quality.
The broader point is that early learning improvements have large long-run benefits. This point has previously been made in the debate over K-12 teacher quality by Chetty et al, and in the debate over K-12 class size reductions by Krueger.
Because early learning improvements have such large long-run benefits, even sizable investments in improving early learning can make good economic sense.