Learn Some Economics: The Benefits of Preschool

Ok dear readers, time to roll up your sleeves.  I’m going to drop some economics on you.  And I’m going to do this regularly with my Learn Some Economics segment so try not to hate me for it just yet.  Wait until I’ve bored you at least a couple of times before you form strong, negative opinions about me.  I’ll do my best to explain academic papers clearly so you don’t get boggled down with technical jargon.  Keep in mind, today’s information may come in handy one day when you end up with an at-risk child of your own.  Based on how debaucherous many of you are, you’re probably quite likely to have at least one problem child.

I’m going to tell you about a study that measured the long-term effects of providing intensive preschool programs to 3- and 4-year old children.  The results are not surprising but their magnitude is quite astonishing.  The experiment is called The High/Scope Perry Preschool Program and took place in Michigan between 1958 and 1962.  Intensive preschooling was randomly provided to 58 of 123 children identified as “at-risk children” (defined by low parental education and disadvantaged backgrounds).  The researchers monitored both the 58 children who participated in the program (the treatment group, which I’ve dubbed the “lucky ones”) and the 65 who had not (the control group, dubbed the “unlucky ones”).

The delivery of the preschool program consisted of three parts: class time, where the student teacher ratio was 5 to 1, home visitation by the teacher and group meetings with parents.  The cost of the program per child was calculated to be $15,166, expressed in year 2000 dollars.  During the years that ensued, the lucky ones and the unlucky ones were surveyed periodically and cost-benefit analyses were produced at various age intervals.  In the paper I am going to discuss, the authors calculated the cost-benefit analysis of the participants at age 40 when data were available for 70 men and 49 women.

Now for the results.  The value of the program was measured in monetary terms based on long-term benefits to society as whole (the participants and the general public).  The lucky ones benefitted from the program by receiving significantly higher earnings than the unlucky ones (lifetime earnings of 11-34 percent more for men, 19-36 percent more for women).  The general public benefitted from lower welfare payments to the participants, lower criminal justice costs and higher tax revenues (from the lucky ones’ higher earnings).  Total benefits of the program to society totaled $195,261 on average per participant.  Subtracting the cost of the program, the benefits outweighed the costs by a whopping $180,455 per lucky one.  In other words, the program repaid $12.90 for every $1 invested in the preschool program.   The program’s benefits were derived mainly from reduced criminal activity by the male lucky ones.  The magnitude of the criminal activity costs saved surprised me most: by the age of 65, male lucky ones were estimated to have imposed non-discounted economic costs to society totaling $1 million versus $1.8 million in crime costs imposed by the unlucky ones.

Although the authors are not able to determine which component of the 3-step preschooling process was the most effective, it is known that early cognitive development predicts behaviour, opportunities and experiences later in life.  The lucky ones were given a chance to develop their cognitive abilities at a very early age which led to higher education, more self discipline, lower dependency on others and lower incidence of crime.  For example, by age 27, the female lucky ones were 3 times more likely to have graduated from high school than the unlucky ones.

How do these findings affect you directly?  Well, if you’re worried about your future children bumming money off of you well into their 30s, I suggest you start looking for an intense preschool program for those unborn kiddies of yours.

Source: The High/Scope Perry Preschool Project: Cost-Benefit Analysis using Data from the Age-40 Follow-Up by Belfield, Nores, Barnett and Schweinhart, published in the Journal of Human Resources in 2006


7 Comments on “Learn Some Economics: The Benefits of Preschool”

  1. Lyndsey says:

    a couple of questions: are there any recent comparable studies done on similar programs? how different was general preschool then to general preschool now? maybe preschool now would be considered “intense” as compared to preschool of the 50s/60s?

    • Lyndsey says:

      oh and great blog so far!!!

    • Sandra says:

      You have access to academic journals right? Here’s some night-time reading material for you:

      “The effect of preschool on the school performance of children from immigrant families. Results from an introduction of free preschool in two districts in Oslo”, 2010
      “Long Term Effects of Preschool Investment on School Performance and Labor Market Outcome”, 2003
      “Economic Development Benefits of Preschool Expansion in Kalamazoo County”, 2008

      Maybe you can write a follow-up post to complement this one, answering all of your keener questions.

      • Lyndsey says:

        Haha, just wanted to keep you on your toes!

        And maybe I will write a follow-up post. Thanks for the references.

  2. Cheryl says:

    I just watched the documentary “Waiting for Superman” and I thought of this lesson right away. You explained it superbly.

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