An excellent recent paper by Greg Duncan and Aaron Sojourner has important implications for understanding the effects of different types of early childhood programs for different income groups.

Duncan and Sojourner look at the effects of the Infant Health and Development Program (IHDP) on later IQ and test scores of children from different income groups.  This program was modeled after the Abecedarian program, which provided full-time full-year child care and preschool from birth to age 5. However, the IHDP program was more focused on early childcare. The main service that the IHDP program provided was high-quality child care at ages 1 and 2. IHDP also provided some home visiting services from birth to age 3. However, services ended at age 3, unlike the Abecedarian program, which went on to provide preschool at ages 3 and 4.

The IHDP was run as a random assignment experiment. Because of random assignment, we would expect that any differences between the treatment group which received program services, and a control group which did not, are most likely to be due to the IHDP program, and not due to unobserved differences between these two groups.

IHDP was targeted at low-birth-weight children. However, Duncan and Sojourner focus their attention at results for the “heavier” low-birth-weight children.  They argue that with some weighting of their sample, the control group’s developmental pattern is similar to the development of typical U.S. children. Therefore, they argue that their estimates of IHDP effects for “heavier” low-birth-weight children might reflect what this program would do in the general U.S. population.

Although IHDP was targeted at low-birth-weight children, it was not targeted explicitly by income. Therefore, IHDP is unusual among early childhood programs in having random assignment evidence for the effects of a program for children from different income groups.

Duncan and Sojourner’s results imply that an IHDP-style program provided to the general U.S. population would have substantial effects in reducing the educational achievement gaps between different income groups. They estimate that for the “heavier” sample of children, IHDP had large effects in both the short-run and long-run on  improving IQ and test scores for low-income children (from families below 180% of the poverty line), but did not have statistically significant long-run effects on higher-income children (from families above 180% of the poverty line).  (There were some short-run positive effects of the IHDP program for higher-income children, but long-run effects were statistically insignificant, with a tendency towards negative point estimates.)

For example, as of age 8 (third grade), an IHDP-style program targeted at low-income children would be expected to increase educational achievement among this group by a sufficient amount to eliminate between one-third and three-fifths of the expected achievement gap at 3^rd grade between low-income and higher-income children.  These empirical estimates for 3^rd grade, 5 years after program services ceased, imply that the program moves the achievement of low-income children up by about one-half grade level.  (Effect sizes are 0.30 in reading, 0.44 in math, which are about half the grade 2 to grade 3 gains in those subjects estimated by Bloom et al.)

Using estimates from Chetty et al. on how 3^rd grade test scores affect later adult earnings, and estimates from Bartik, Gormley and Adelstein of expected adult income of children from different income groups, I project that for low-income children, the 3^rd grade test score effects estimated by Duncan/Sojourner would be consistent with a lifetime increase in adult earnings of about 13%. This is a large effect that would have significant effects on the income distribution.

I also project from the Duncan/Sojourner estimates, and the Abecedarian results, that an IHDP program targeted at low-income families is likely to pass a benefit-cost test. The program appears to have annual costs similar to the Abecedarian program, of around $16,000 per year for the two years of child care provided, with some additional funds for the home visiting.  $35,000 per child would probably cover total three-year program costs in an established, permanent IHDP program.  Based on the Abecedarian program (see calculations reported in chapter 4 of my book Investing in Kids ), savings in costs for other subsidized child care programs might offset  at least 15% of program costs, so the net incremental costs of IHDP might be $30,000 per child.

On the benefit side, I project, based on Duncan and Sojourner’s estimated test score effects, and Chetty et al.’s estimated effects on adult earnings, that the IHDP might increase the present value of future adult earnings for former participants by $33,000 per participant. There also might be other benefits associated with program participation, such as lower crime by former participants. (Some suggestive but inconclusive evidence for anti-crime effects is reported by McCormick et al.) In addition, we would expect considerable earnings benefits for parents due to the free child care provided by IHDP, which will increase parental work experience in the short-run. This short-run increase in work experience will develop job skills, and thereby increase parental earnings in the long-run.  Based on the Abecedarian program, such parental benefits might have a lifetime present value of around $30,000 per family participating in the program. (This is calculated as 2/5ths of the parental benefits that I calculated for the Abecedarian program in chapter 4 of Investing in Kids ).

How does this fit into the broader research literature on early childhood programs? We only have limited evidence on how effects on child development of early childhood programs vary with the child’s family income. As argued in Bartik, Gormley, and Adelstein, the evidence from universal preschool programs such as Tulsa’s suggest that there are similar test score effects and future dollar earnings effects for children from different income groups. On the other hand, estimates from the Nurse Family Partnership suggest that home visiting programs from the pre-natal period up to age 2 have stronger effects on children from disadvantaged families.

Therefore, based on what we know now, it might be a reasonable hypothesis that early childhood development programs that intervene via home visiting or child care prior to age 3 have more significant effects on child development and life course for children from lower-income families,  whereas children from higher income families have much smaller benefits from these very early interventions. On the other hand, preschool, at least at age 4, seems to have broader benefits across children from different income groups.

This makes some sense in terms of what parents from different income groups can typically provide for children at different ages.  High-quality developmental early-age child care services and parenting programs might be a more valuable supplemental on average for at least some low-income families, whereas on average more middle-income families might be more readily able to do just as well in promoting such early-age child development on their own.  But preschool may provide services that are difficult for parents from a wide variety of income groups to provide on their own. For example, preschool may help develop a child’s skills in dealing with larger groups of peers and with non-parental authority figures, which may be useful skills in school and later on in life.

In sum, we shouldn’t over-generalize about the effects of early childhood programs by income group. The pattern of income group effects appears to vary by type of program and by what ages are being considered.

Does this mean that early-age child care programs such as IHDP should be targeted only at low-income families? Not necessarily, for at least two reasons. First, as argued by Duncan and Sojourner, IHDP provided child care in income-integrated settings. It is possible that part of the positive effects of IHDP were related to positive peer effects from such income-integration. It is possible for a targeted child care program to include income integration (for example, by providing vouchers to programs that include other income groups), but perhaps more challenging to do so.

Second, even if early age child care programs’ benefits are less for lower-income families for former child participants, we should also consider effects on parents. The free child care may have large benefits for parents in higher-income families.

One policy option would be to explore programs similar to some Scandinavian countries, in which universal child-care programs are combined with family-income-based fees. This would encourage income integration of child-care programs and provide some help for parents from all income groups, while targeting more governmental assistance for these very expensive child care services on lower-income children.  As children get to preschool age, public assistance might be broadened to more income groups, to reflect the broader benefits of preschool across income groups.