Economic Benefits of Investments in Young Children: New Findings

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Economic Benefits of Investments in Young
Children New Findings

• Clive R. Belfield
• Queens College,
• City University of New York
• belfield_at_qc.edu

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Arguments for Research

• US achievement levels are weak, relative to the
  (increasing) skill needs with demographic
  change, labor force quality/quantity shortages
  are ahead
• Crime costs are escalating with imprisonment the
  new cohort of criminals faces real and stigmatic
  difficulties
• Family structure establishes a non-cognitive
  foundation /pre-condition for learning but weak
  family structures (single parents) are growing
• Remedies for youth and college-aspirants are too
  expensive, unable to overcome entrenched
  disadvantages
• These arguments motivate research on early
  investments

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New Research

• 1 Child-related and budgetary consequences of
• More productive learning
• Lower rates of special education
• Improved child health and welfare
• 2 State, district, and agency-level analysis of
  economic gains
• 3 Macroeconomic analysis
• 4 Details of program design

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1 Consequences

• More Productive Learning
• In schools with more pre-schoolers
• Teachers report higher satisfaction, lower
  turnover/absence
• Principals report fewer thefts less fighting
  safer schools
• Pre-schooling is valued by teachers
• 62 (strongly) agree attending pre-school is
  very important for success in Kindergarten
• Special Education
• Pre-schooling reduces rates by 25
• In the Chicago study, rates are lower by
• 60 for mental retardation
• 32 for speech/language impairment
• 38 for specific learning disabilities
• Placement in SE is not precise
• Child Well-Being
• Significant gain in health screening rates
• Fewer abuse cases

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Teenage Parenting
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2 State Benefits of Pre-K

• Economic Model for each state
• 1. Propose new enrollment level in pre-K
• 2. Cost out provision for new enrollees
• 3. Derive benefit impacts and calculate unit cost
  saving per impact
• S Lower grade retention and special education
• W Improved child well-being
• J Reduced criminal activity
• T Higher tax revenues (lower welfare reliance)
• 4. Sum cost savings (BSWJT)
• 5. Compare benefits with costs
• 6. Apply sensitivity analysis

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Universal Pre-K in Ohio

• Investment cost (C) 482.40
• School system cost-savings 241.89
• Tax revenue gains family 19.21
• Tax revenue gains participant 120.32
• Criminal justice system savings 375.41
• Health expenditure savings 1.18
• Welfare expenditure savings 23.58
• Total benefits (B) 781.59
• Benefits Costs (B-C) 299.19
• Benefits/Costs (B/C) 1.62

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Fiscal Benefits from Universal Pre-K

• Economic models show positive returns at the
  state level
• Benefits easily exceed costs

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3 Macroeconomic Analysis

• More workforce
• (Participation rates, intensity)
• More productive workforce
• (Skills, cognitive ability, use of capital)
• Lower government expenditures
• (Lower taxes, better targeting of programs)
• Feedback effects
• Higher national income

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4 Details of Programs

• Focus on behavior, well-being, and academics
• Academic effect is very strong, relative to other
  characteristics
• Pre-schoolers exhibit self-control problems in K
• Intensity of program
• Full-day versus half-day
• Full-year versus school-year
• Competitive versus government provision Who
  should run pre-school centers?
• Complementarity between child care and
  back-to-work programs