Analyzes how investments in early childhood programs benefit state and local economies through increased per capita earnings.

The author examined research on three early childhood programs—universal prekindergarten, the Abecedarian program, and the Nurse-Family Partnership Program to show that “high-quality early childhood programs provided sizable benefits to state and local economies. For each $1 invested in high-quality early childhood programs, a state economy got a $2 to $3 return on investment, measured by increased jobs or earnings for state residents…. Benefits came mainly from the effects on child participants, who were more likely to be educated, trained, and employed as adults. In addition, when stable, affordable, high-quality child care was available, parents were able to improve their productivity by putting in more work hours, missing fewer work days, experiencing less stress, and/or pursuing education. Ensuring that early childhood programs were of high quality was key to fully realizing their benefits. Although it could be a challenge to finance early childhood programs up front, states could capitalize on several substantial short-term benefits that these programs produce. Over the long term, these programs would pay for themselves” (p.27). (Abstractor: Author and Website Staff)

Full publication date: Early Childhood Programs as an Economic Development  Tool: Investing Early to Prepare the Future Workforce

Major Findings & Recommendations

The author’s analysis finds that for each dollar invested, the early childhood programs reviewed – universal prekindergarten, the Abecedarian program, and the Nurse-Family Partnership program-- create a return on investment of around $2 to $3 in increased earnings to state residents (p.29). In particular, three aspects of the programs cause increased state per capita earnings: employment effects on child participants, increased education or labor supply of parents, and stimulation of the state economy (p. 30). “In order to realize the high returns on investment that early childhood programs can provide to state and local economies, the programs must adhere to high quality standards and best practices.” The author estimates how much the program’s return on investment would be affected by a number of education standards and best practices, including class size, staff credentials, teacher-student interactions, time intensity of services, targeted or universal eligibility, and institution of delivery. (p.35) (Abstractor: Author and Website Staff)