Economic
benefits of quality preschool education for America's 3- and 4-year olds
National Institute for Early
Education Research (NIEER) estimates the average benefits from a
universally accessible program at ages 3 and 4 to be at least $25,000
per child, substantially more than the costs. The estimated cost-
per-child (mixing half day, school day, and full day programs) is $8703
annually and $17,406 for two years.
NIEER derived benefit estimates by
using the following data:
• The Chicago Child Parent Center study produced a present value
(using a 3% real discount rate) of $48,000 in benefits per child from a
half-day public school preschool (an average of 1.5 years attendance)
for low-income children.
The study found at age 20,
participants were more likely to have finished high school than children
who weren't in the program. They were also less likely to have been held
back in school, less likely to have needed remedial help, and less
likely to have been arrested. It's estimated for every dollar invested,
the return is $7, based on the reduced costs of remedial education and
justice system expenditures, and in the increased earnings and projected
tax revenues for participants.
• The Perry Preschool program
produced a present value (using a 3% discount rate) of $108,000 per
child from a half-day public preschool program (most attended two years,
beginning at age three) for very low-income children. (Our best estimate
is that the benefits are larger from two years of preschool than one,
but not twice as large.)
The study found at age 27, program
participants had higher monthly earnings and completed a higher level of
schooling than children who didn't take part. There were also fewer
arrests among participants and a lower percentage received social
services over the past 10 years. It's estimated the program also
returned $7 for every dollar invested.
• Both these studies only look
at low–income children, so estimates must be made concerning benefits
for other children. It is reasonable to assume middle to high-income
children will also receive benefits, based on the preventable problems
these children encounter. For example, 9% of children in families with
incomes in the top 20% are held back in school, compared with 18% in the
lowest 20%. So NIEER conservatively applied the lower benefit figure of
$48,000 from the Chicago Child Parent Study to the poorest 20% of the
population, while assuming benefits for the middle 60% of the population
would be half as large, and benefits for the top 20% of income level
would be only 10% of those for poor children. This yields an average
benefit estimate across all children of $25,000 per child.
• Both of the studies cited
above provide somewhat incomplete estimates of the value of benefits.
For example, increased educational attainment is likely to improve
long-term health outcomes, personal financial decisions, and the
economic prospects of the next generation. None of these benefits were
estimated in the two studies. Also, since both were studies of half-day
preschool programs, neither provides an estimate for the value of
increased parental earnings likely to result from the child care
provided by school-day and full-day programs.
http://nieer.org/resources/facts/index.php?FastFactID=6