June 1 2007

Early learning is linked to the state's future vitality, and the research demonstrates that connection in a very quantifiable way.

Research shows the importance of early learning on adult achievement, which has a direct impact on the state’s ability to compete nationally and internationally. Access to quality early learning can have a direct impact on the state’s future workforce – and the ability of that workforce to attract and keep business and industry. Studies show a high return on investment that makes early learning a good economic development strategy as well as sound education policy. That means investing now equals savings later in the form of reduced spending on other government programs and a better-prepared workforce.

Early learning as an investment strategy is shown to out-perform even stock market investments – with high rates of return demonstrated in many different research reports. To policymakers facing escalating costs of corrections and other human services programs, investing now in early learning may have appeal as a sound investment to curtail future cost escalation.

Links to Resources:

Many Happy Returns: Three Economic Models that Make the Case for School Readiness. Bruner. State Early Childhood Policy Technical Assistance Network. (2004)

This report provides a summary of several return on investment studies, specifically identifying the returns related to child development and the economic impact for the learners as adults and the community as a whole.

Can Preschool Alone Prevent Early Learning Failure? From Preventing Early School Failure: Research, Policy, and Practice. Robert Slavin, Nancy Karwweit and Barbara Wasik. (1994) 

For 40 years, study after study has shown a high rate of return on investments in early learning programs. The study notes, however, that the rate of return is highest when high quality programs reach the children most in need. The most at-risk students reap the most significant benefit from quality early learning opportunities.

Investing in our Children: What We Know and Don’t Know About the Costs and Benefits of Early Childhood Interventions. RAND (1998)

Early Childhood Interventions: Proven Results, Future Promise. RAND. (2005)

The Cost and Benefits of Universal Preschool in California. RAND. (2005)

The RAND Corporation is a nonprofit institution that helps improve policy and decision-making through research and analysis. These represent a sample of studies and papers from RAND researchers and analysts on early learning policy and programs.

In these reports, the research institution reviews available research to answer two important questions regarding early learning: Do early interventions targeted at disadvantaged children benefit participating children and families? And might government funds invested early in the lives of some children result in compensating decreases in government expenditures? The reports identify economic benefit ranging from $1.26 to $17 for every $1 invested in high quality early learning programs. RAND also looks specifically at the costs and benefits of universal pre-k programs in California. The findings can be useful to policymakers considering early learning policy in other states as well.

Early Childhood Development: Economic Development with a High Public Return. Art Rolnick and Rob Grunewald. Federal Reserve Bank of Minneapolis. (2003)

According to this report, investment in early learning results in economic success not only for the child but also the overall economy. Decreased spending on government programs and a higher tax base are tangible results of investments in early learning, as children with access to quality early learning have higher earnings potential in the long term than their peers. The report estimates as much as a 12 percent return on investment over time for high-quality early learning programs.

The Economic Benefits of High-Quality Early Childhood Programs: What Makes the Difference. Committee for Economic Development. (2006)

The Economic Promise of Investing in High-Quality Preschool: Using Early Education to Improve Economic Growth and the Fiscal Sustainability of States and the Nation. Committee for Economic Development. (2006)

Taking Preschool Education Seriously as an Economic Development Program: Effects on Jobs and Earnings of State Residents Compared to Traditional Economic Development Programs. Committee for Economic Development. (2006)

Throughout its 65-year history, the Committee for Economic Development  – a business-sponsored national research and policy group – has addressed national priorities that promote sustained economic growth and development to benefit all Americans. CED’s work on presenting the economic arguments for investing in early childhood education is among the top priorities of the organization.

Several reports and papers released by the Committee for Economic Development (CED) recommend state and federal policy to guarantee universal free access to pre-kindergarten, citing the need for the nation’s children to be able to compete in a global economy.  In identifying successful early learning programs, the CED reports identify several keys to success, including highly qualified teachers, intensive programming, small class size, and a transition to early elementary school. The reports also note the long term return on investment to be as high as $10 for every $1 invested.  

Invest in the Very Young. James Heckman. (2002) 

Nobel Laureate in Economic Sciences James Heckman’s research and writings demonstrate high return on investment in early learning programs, noting in particular that investment in early learning opportunities yield the highest return versus investment later in the education lifecycle.

The Effects of Investing in Early Education on Economic Growth. The Brookings Institute. (2006)

The Brookings research looks at return on investment including the increase in Gross Domestic Product (GDP) that would likely result from a national strategy to implement high quality early learning opportunities for all preschool children. While the study is nationally-based, the lessons learned can be applied to state policy.

Invest Now or Pay More Later: Early Childhood Education Promises Savings to Pennsylvania School Districts. Harvey, James. (Feb. 2006)

In studying the potential cost savings benefits for school districts in Pennsylvania, this research estimates that schools could recoup $0.78 for every dollar spent on preschool learning program through reduced participation in special education and reduced grade retention among other benefits. Overall, Pennsylvania would recoup $1.68 for every dollar invested through savings in educational costs and other program costs such as social services.