Investing in Early Childhood Development: Science, Benefits and Common Sense Joan Lombardi, Ph.D. April 12, 2007 Prepared for An Agenda for Shared Prosperity forum Sponsored by The Economic Policy Institute and The Institute for America’s Future

If we are serious about shifting the odds for at risk children, we need to start early Young children need good health, strong families and positive early learning experiences to assure they are ready to succeed in school. To reach these goals we should increase investments in at risk children, beginning in the prenatal period and continuing through school entry. These investments should be followed by improvements in the quality of K-3.

What does science tell us? Early experiences matter- early experiences have a long term impact on health, behavior and learning The interaction of what we are born with and early experiences shapes the architecture of the brain Domains of development are integrated: social, emotional, cognitive, physical

Prenatal and early health care Nutrition Parent child relationships Key elements of early experiences that predict later outcomes, among others Poverty Prenatal and early health care Nutrition Parent child relationships Parental sensitivity Maternal education Early learning experiences

Abecedarian: Academic Benefits If you look at the findings from a program in North Carolina, called Abecedarian, you see similar effects. Source: Carolina Abecedarian Study, W. Steven Barnett, NIEER

Perry Preschool: Educational Effects I am going to quickly go through selected data from three main studies which have the longest tracking of data. I will also mention a few more recent studies. Many of you have likely heard the Perry Preschool data before - that's most likely because the evaluation was done with strong methodology and because it tracks the participants over the longest period - 40 years. Half day program… See important effects - note the difference in special education placements - would see real savings from that, also graduation rate Source: High Scope Educational Research Foundation

Perry: Economic Effects at Age 27 Also see higher rate of earnings and home ownership and receipt of welfare Source: High Scope Educational Research Foundation

Perry Preschool: Economic Effects at 40 More had earnings, were employed, and had savings account Source: High Scope Educational Research Foundation

Return on Investment: Perry Preschool Total Benefit-Cost Ratio = $8.74 to $1 Estimated Total Annual Rate of Return = 16% Public Rate of Return = 12% Source: Art Rolnick and Rob Grunewald, Minneapolis Federal Reserve These economists find significant rates of return from those programs. It is important to note, that Perry preschool costs were high with well qualified teachers and small class sizes and a population that was significantly at risk. Part of what is interesting about the data is that these programs are being looked at from the tough cost -benefit approach - most social programs can't show a return.

Human Capital Rate of Return Another way of looking at the rate of return is to compare it to other investments that could be made later, Jim Heckman, a nobel prize winning economist, has studied the economics of human skill formation during his career and has recently focused on early education and shows the return rate in this figure. He also talks in great detail about skills of motivation, persistence and self control as key workforce skills - that are fostered early. describes how individual productivity can be fostered by investments in young children, particularly children in poverty or other adverse circumstances. The report’s findings are based on an analysis of the impact of current workforce conditions, workforce skills, the impact of baby boomer retirements, crime and family environments. For example, the report finds that America's workforce is not gaining in quality or productivity, but rather seeing slower growth. He argues that if this trend continues, there will be fewer educated individuals in the workforce and lower productivity than in previous periods. Key findings of the report include: Cognitive and noncognitive abilities are important for a productive workforce, and gaps that emerge early are difficult to change. Because skills are accumulated, starting early and over time, investing in young children is an investment in future productivity and public safety. Family environments are important in determining education and skills. Growing numbers of children face adverse environments that restrict the development of these skills. Early education and other early interventions such as home visits can mitigate the effects of poor family environments. Key workforce skills such as motivation, persistence and self-control are developed early. Heckman concludes that K-12 schooling comes too late, and other remedies are prohibitively costly as well (e.g., job training programs and second-chance GED programs). Source: Heckman and Masterov, The Productivity Argument for Investing in Young Children, October 2004.

Low-Income Status Varies by Age The younger the children, the more likely they are to be poor Some research suggests that the younger the children, the more harmful persistent and intensive poverty is to young children There are increasingly evidence-based strategies to help families with young children, especially very young children Source: National Center for Children in Poverty. (2006). Basic Facts About Low-Income Children: Birth to Age 18.

Percentage of Income Paid for Care *Higher Income is over 200% of poverty, very low income is under 100% of poverty. SOURCE: Giannarelli and Barsimantov, ‘Child Care Expenses of America’s Families,” Urban Institute, 2000.

State investment in early childhood grows but still far from meeting the need States investing in 0-5 but funding limited, particularly for 0-3 (Home visiting, Early Head Start, prek with set aside for 0-3, public private partnerships 0-5) In 2005-06, 38 states invested in prekindergarten initiatives spending nearly $3.3 billion, with 942,766 children participating While the number of 4 year olds served has grown, the number of 3 year olds has remained relatively stable Quality varies across the states, almost half the states do not meet the benchmark of requiring a BA or higher for all lead teachers. Source of Prek data: The State of Preschool 2006, NIEER

Federal policies fail to keep up with what we know from science is important for early development and later success Too many families still not covered by FMLA, and of those covered, far too many cannot afford to take unpaid leave Head Start- about half of the eligible served Early Head Start, only 3 % of the eligible served Child Care and Development Fund-only one in seven eligible served, limited investments in quality

With flat federal funding, number of children receiving child care assistance has declined Sources: Child Care Bureau and Analytic Perspectives, Budget of the United States Government, Fiscal Year 2008, slide by CLASP.

Current Federal and State Funds for Head Start, Prek, and Child Care* Federal and state spending on Head Start and Prek $10.2b Total spending on Head Start and State prek 6.8b Federal Head Start (06) 3.3b State Prek Initiatives (05-06) $11.7b Total Federal and State Child Care Subsidy (This assumes $8.5 Federal for 05 CCDBG and TANF transfer and direct) $3.5b in Child and Dependent Care Tax Credit and DCAP (est 06) * Does not include SSBG, Title I, special ed or CCFP 05-06)

Three different estimates for additional investments needed Cost-Effective Investments in Children (J. Isaacs. Jan, 2007)* For high quality early childhood education for three and four year olds $18b additional in 2008, $20b additional in 2012 For home visiting and healthy development of infants $1b additional in 2008, $4 b additional in 2012 *This assumes a very limited investment in infants and toddlers, particularly in quality child care for 0-3 Next Steps for Federal Child Care Policy (M. Greenberg, Feb 2007)** $18b per year additional (11b federal and 7b state) for child care guarantee and basic quality improvements** $ 5 b per year (for making the CDCTC refundable and increasing the credit-- based on Urban Institute estimates of $25 b over five) **This assumes a limited additional investment in quality Success by Ten: Intervening Early, Often and Effectively in the Education of Young Children (Ludwig and Sawhill, February 07) $40b additional for transforming and expanding the current early education system into a more intensive program based on Abecedarian and other intensive models.*** This proposal calls for a phase in over ten years. Ludwig and Sawhill also call for improving early grades in school through the use of redirecting Title I funding for programs that have proven effective. ***Estimate is $56b higher than under current law if all eligible children participate, $40b with 75 percent participating.

Time for a New National Investment in Early Childhood Development Expand FMLA and provide incentives to states to provide paid leave Assure access to quality health care for all young children and their families and provide developmental screening and follow up Invest in Head Start 0-5, with a special focus on expanding Early Head Start Transform child care to support working families and their children by assuring access to all families below 200 percent of poverty and requiring states to develop a quality improvement system Provide an infusion of new resources to states to promote early learning 0-5 through a diverse delivery system (parenting support, quality improvements for child care 0-5, preschool, family literacy) At least triple investments over current spending.