The Economic Impact of Early Childhood Education
A new study out of Kansas is adding to the pile of evidence that early childhood education not only has academic benefits for children (particularly disadvantaged youth), but economic benefits for society.
America’s Edge, a national nonprofit organization of business leaders whose members “work to strengthen businesses and the economy through proven investments in children,” has released a new report finding that in the short-term, for every $1 invested in early-learning programs in the state, a total of $1.68 is generated in spending. Early childhood education outperforms retail trade ($1.65), transportation ($1.63), construction ($1.59), wholesale trade ($1.51), and manufacturing ($1.46).
And remember, these are short-term benefits. Many other studies have documented the longer-term economic benefits of investing in early learning. Consider:
- An evaluation of Chicago Public Schools' federally funded Child Parent Centers (CPCs) finding that for every dollar invested in the preschool program, nearly $11 is projected to return to society over participants' lifetimes—the equivalent of an 18 percent annual return.
- A study showing that Georgia’s lottery-funded pre-kindergarten program was estimated to save the state $212.9 million over six calendar years (and produced an estimated $35.6 million in net savings in 2010 alone).
- A report showing that Michigan's Great Start Readiness Program, which supports preschool for at-risk children, has saved the state at least $1 billion over the past 25 years.
- A study of the famous Perry Preschool Program conducted over 40 years that found that society got back $16 for every tax dollar invested in the early care and education program.
The economic benefits come in a variety of forms, including reduced costs associated with grade retention and special education placements, lower welfare and unemployment spending, lower arrest rates, and higher earnings and tax revenues.
These are by no means the only studies finding an economic benefit to pre-K. So given the ever-growing evidence on the economic benefits of early childhood education, one might think that policymakers would spare such programs in budget cuts. But that's not the case. According to the National Institute of Early Education Research, overall funding for state pre-K programs has dipped for the second year in a row (though enrollment in these programs has gone up), with projected reductions next year as well.
As Tyler Nottberg, CEO of U.S. Engineering and associated with the America's Edge report, is quoted in The Kansas City Star, “The state of Kansas invests $141 million on state-funded early learning programs, which in turn generate a total of about $237 million in economic activity…The type of loss that Kansas’ businesses would suffer in the event that these dollars are cut is something that I think we certainly would consider to be catastrophic.”
As policymakers all over the country consider what budget cuts to make, they should consider his point. And for economic, academic and equity reasons, early learning activities should be spared.
Image by Polylerus (public domain)
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