Milagros Nores and Steve Barnett have written a recently-released report on how kindergarten readiness and preschool enrollment varies by different groups, including for different income groups. What they document is that at kindergarten entrance, children in disadvantaged groups are far behind children from advantaged groups in school readiness, as measured by cognitive test scores. These kindergarten readiness gaps are not offset by pre-K attendance at age 4, as it appears attendance in quality pre-K is higher for children from more advantaged backgrounds.

For example, they find that children from families with incomes below twice the poverty line have kindergarten entry test scores that average between 0.6 and 0.7 standard deviations lower than the test scores of children from families with incomes above twice the poverty line. To put this in terms that might be more intuitive, average kindergarten entry test scores for low-income children are at about the 40th percentile of all children, whereas average kindergarten entry test scores for higher-income children are at about the 65th percentile of all children, a gap of 25 percentiles. On the other hand, they find that while only about 25% of higher –income 4-year olds are enrolled in pre-K programs that are high-quality, this percentage is still lower for low-income children, at around 18%. Quality pre-K enrollment patterns are reinforcing rather than alleviating kindergarten readiness gaps.

In this blog post, I want to relate these kindergarten readiness gaps to the adult earnings distribution, and see what various designs of early childhood education interventions can do to address these achievement and earnings gaps.

Eliminating the kindergarten readiness gap would do a great deal to help the future prospects of children from low-income families, but would not come close to eliminating all earnings gaps. Based on the estimated effects of kindergarten test scores on adult earnings, if we eliminated these kindergarten readiness gaps, by increasing kindergarten entry test scores of lower-income children by 25 percentiles, we would predict that this would increase the adult earnings of these children by about 17%. This is certainly a significant lifetime earnings boost. But it is far short of the amount their expected earnings fall below that of their more affluent peers. Children from low-income families would be expected to have future adult earnings of 55% of children from higher-income families. A 17% earnings boost would increase this ratio of earnings of children from the two groups from 55% to 64%. (64%=55% times 1.17). Thus, eliminating the kindergarten readiness gap in cognitive test scores would only close one-fifth of the adult earnings gap (9% improvement in initial 45% gap).

(Notes on calculations. These calculations of earnings ratios rely on relative earnings of the parents of these children, and estimated intergenerational correlations of earnings. In addition, the effects of raising kindergarten test scores are estimated based on research by Chetty et al. Bartik, Gormley and Adelstein use similar methods, and similar methods are also used in my forthcoming book, From Preschool to Prosperity).

One can view the glass as either surprisingly half-full or surprisingly half-empty. On the one hand, it is amazing that just increasing kindergarten entry test scores by 25 percentiles can have such profound effects on adult earnings, increasing earnings by over one-sixth. This is probably attributable to “skills begetting skills” (Heckman). Students who enter kindergarten with stronger test scores test will tend to learn more in kindergarten, and so on.

On the other hand, why doesn’t eliminating the starting cognitive test score gap fully equalize earnings? For several reasons. First, eliminating the kindergarten entry gap does not eliminate subsequent gaps in the quality of K-12 education, or in access to quality post-secondary education, which will affect adult cognitive skills. Second, there is more to skills affecting earnings than cognitive skills, so eliminating cognitive skills gaps does not necessarily skill gaps in “soft skills”. Third, adult earnings are not just affected by skills, but by access to networks and wealth that can help a person get a better job.

What can early childhood education do to reduce these achievement gaps, and to reduce income inequality? Quite a bit, but early childhood education cannot fully solve either the achievement gap problem or the earnings gap problem. Based on studies in Tulsa and Boston, universal pre-K would help both lower-income children and middle-class children to improve their kindergarten entry test scores, and by similar percentiles. Realistic projections suggest that kindergarten entrance scores might increase due to universal pre-K by 15 percentiles for lower-income children, and for higher-income children by 12 percentiles. This would only slightly lower the test score gap, from 25 percentiles to 22 percentiles. These test score increases would be predicted to significantly boost earnings of both groups. The expected future earnings of children from lower-income families would increase by about 10 percent, and by children from upper-income families by about 5 percent. Although these earnings increases are significant for both groups, it would only be predicted to slightly reduce the earnings gap – the predicted earnings of children from lower-income families would increase from 55% to 58% of the predicted future earnings for children from higher-income families.

However, these projections understate the potential income redistribution from early childhood education for at least two reasons. First, universal pre-K by design is helping all children to improve their future prosperity. It could do more to improve income distribution by not helping middle-class children, but this hardly makes sense if the program is benefitting these children. However, as discussed further below, other early childhood education programs are better designed as targeted programs.

Second, these test score projections may understate the future earnings impact of universal pre-K and other early childhood education. There is considerable evidence that early test score impacts of pre-K programs may tend to understate long-term earnings impacts. For example, this is true for the Perry Preschool Program. (See my forthcoming book for more discussion of this point. In that book, I project that Perry’s early test score impacts would predict an adult earnings impact of 12%, which is over one-third below the estimated impact based on actual adult outcomes of 19%.) This understatement is probably because cognitive test score impacts do not capture the benefits of pre-K programs for improving non-cognitive skills.

Some early childhood education programs, such as the Abecedarian/Educare program of full-time child care from birth to age 5, seems to work far better for lower-income children than for other groups. These programs should therefore be designed as targeted programs for lower-income families.

Estimates suggest that an Abecedarian/Educare program can increase future earnings of former child participants from lower-income families by 26%. (Again, my forthcoming book has more supportive information behind this calculation.)This is a huge increase in future living standards. However, again, we should remember that it only closes a portion of the earnings gap. If Abecedarian/Educare was implemented for all children from lower-income backgrounds, it would increase their expected future earnings from 55% to 69% of the expected future earnings of children from upper-income families (69%=1.26 times 55%). This cuts the future earnings gap by 1/4th. (45% to 31%)

We could again debate whether the glass is half-empty or half-full. On the one hand, early childhood education programs do not “solve” the income distribution problem in that they do not make the income distribution match some utopian scheme for perfect earnings equality. On the other hand, perfect earnings equality is probably unachievable. It is amazing what can be done to reduce earnings inequality with just a few years of high-quality targeted intervention in early childhood.

Early childhood education programs have the great advantage of being an economic intervention that we know how to do, that will both promote greater economic growth and greater economic equity, at the same time. Early childhood education does not achieve utopian economic justice, but what one program can, in the real world?