1. Benefit-Cost Analysis of Preschool Education W. Steven Barnett, Ph.D. Director, National Institute for Early Education Research Rutgers—The State University of New Jersey sbarnett@nieer.org

2. Three Economic Analyses Chicago-Child Parent Centers (CPC)– a half-day program on a large scale in the Chicago public schools Quasi-Experimental, n=1286 Abecedarian educational child care– a full-day year-round program in Chapel Hill, NC True Experiment, n=111, follow-up to age 21 High/Scope Perry Preschool– a half-day program on a small scale in the Ypsilanti, MI public schools True Experiment, n=123, follow-up to age 27

3. Long-Term Effects that Generate the Benefits  These and other studies with children from low-income families find: Increased Achievement Test Scores Decreased Grade Retention Decreased Special Education Decreased Crime & Delinquency Increased High School Graduation  Gains vary with quality and age of start

4. CPC: Academic and Social Benefits at School Exit

5. Perry Preschool IQ Over Time

6. Perry Preschool: Educational Effects

7. Perry: Economic Effects at Age 27

8. Perry: Arrests per person by age 27

9. Abecedarian IQ Scores Over Time

10. Abecedarian Reading Ach. Over Time

11. Abecedarian Math Achievement Over Time

12. Abecedarian : Academic Benefits

13. Abecedarian: Benefits to Mothers and Children

14. Estimating Costs and Benefits for All 3 Longitudinal Studies n Abecedarian has the most complete benefit estimates n No crime reduction benefits found in ABC study (but little crime to prevent) n No abuse and neglect data collected in Perry or ABC studies n No health effects data collected in CPC

15. Abecedarian’s Marginal Benefits n Cost-savings in K-12 schooling n Productivity and earnings n Maternal Earnings n Welfare n Crime n Intergenerational Earnings effects n Improved Health (smoking)

16. Abecedarian: Present Value of All Benefits Rate of Discount Benefit 3%5%7% Compensation $116,861 $69,985 $44,940 K-12 Education 8,836 7,375 6,205 Smoking/Health 17,781 4,166 1,008 Welfare 196 129 85 Higher Ed. Cost -8,128 -5,621 -3,920 Total Benefits $135,546 $76,034 $48,318

17. Abecedarian: Net Present Value Rate of Discount 3%5%7% Total Benefits $135,546 $76,034 $48,318 Cost – FPG 35,864 34,599 33,421 Cost – PS 41,916 40,427 39,041 Net Present Value FPG Setting $99,682 $41,435 $14,897 PS Setting $93,630 $35,607 $ 9,277

18. Original Estimates from Three Cost – Benefit Analyses Cost Benefit to Society  Perry Preschool: $12,000$108,000  Abecedarian: $36,000$136,000  CPC: $7,000$ 48,000 Figures rounded to nearest $1,000. All three study’s costs and economic benefits discounted at 3%.

19. Comparably Calculated Costs and Benefits for the 3 Studies

20. Economic Benefits ($2002)

21. Similarities and Differences Across the 3 Studies n Costs and benefits vary in magnitude across the three studies n Most but not all types of benefits found in all 3 studies n Programs vary in intensity and duration n Population and context vary by study n Variations in program, population, and context plausibly explain differences in BCA

22. Program Characteristics Perry Chi. Abec. Child Age 3 or 4 - 5 3 or 4 - 5 0-5 Duration Part-Day Part-Day Full-Day School Yr School Yr Full Year Entry Period 1962-65 1983-85 1972-77

23. Population Characteristics Perry Chi. Abec. Maternal HSG (entry) 21% 64% 34% Two Parents (entry) 53% 32% 24% IQ at age 6 (control) 86 --- 93 Adult Arrests (control) 4.0 --- 1.5 Juv. Arrests (control).6.8 ---

24. General Context - 2000 Ypsil.Chicago Chapel H Mean$41,000$54,000 $64,000 HH Income College 20% 19% 37% Grad (pop) Cigarette $1.25 (MI) $.98 (IL) $.05 (NC) Tax (per pack)

25. Limitations & Future Studies 1. Small samples from a few locations: program, population and context likely affect benefits 2. Benefits included vary across studies 3. Only 1 study of child care impacts on maternal earnings, somewhat higher than econometric estimates of 10-15 percent ($2000-$3000) 4. Much is still excluded

26. Economic Benefits Excluded  Return on education and skills in nonmarket activities (parenting, marriage, leisure) and consumer activities.  Status and consumption value of education  Better health, accident reduction  Better timing and spacing of births, less abortion

27. Conclusions  Preschool produces cognitive and social emotional gains for children (at least disadvantaged)  Quality preschool education can be a good economic investment  Economic benefits vary with program, population, and context characteristics  Similarities and differences in outcomes and economic benefits across studies are reasonable