The Impressive Economic Payback of Early Education

In a world where we’re always looking for the next best investment opportunity, one might not consider early childhood education as the first choice. Yet, it’s an investment that holds immense promise, one that consistently yields high returns, both for the individual and society. For every single dollar poured into quality early childhood education, we can expect a whopping $11 return over the course of a child’s life. These aren’t just abstract numbers or whimsical forecasts; they’re outcomes of a robust study conducted in the heartland of America—Chicago. This ratio equates to an astonishing 18 percent annual return on investment, outperforming many traditional financial investment vehicles.

But how is this possible? And what exactly does it mean to invest in early childhood education? Is it merely about opening more preschools and kindergartens or is there more to the story? Let’s delve deeper into this fascinating subject and unravel how quality early education might just be one of the most lucrative investments we can make—for our children, our economy, and our society.

Setting the Stage – The Child Parent Centers of Chicago

The program under the microscope is the federally funded Child Parent Centers (CPCs) established in 1967 under the banner of the Chicago Public Schools. These CPCs represent one of the first large-scale early education programs and provide services for low-income families starting from age three, extending up to age nine (or the third grade). Imagine, right from the tender age of three, these children are guided and nurtured, paving their way for a brighter future.

The Impact of Early Education – A Long-term Economic Analysis

Reynolds and his team set out to evaluate the effectiveness of these CPCs and the resulting impact on society. To do this, they surveyed participants and their parents, and analyzed a multitude of records, from education and employment to public aid, criminal justice, and substance use.

What they discovered was remarkable.

The Societal Returns of Early Education

As it turns out, high-quality early childhood programs like the CPCs contribute significantly to individual well-being and societal health. So how exactly do these benefits materialize, you might ask? In numerous ways, ranging from increased earnings and tax revenues to averted costs related to crime, child welfare, special education, and grade retention.

The Economics of Early Education

Let’s break down the numbers, shall we? In terms of economic benefits, the preschool part of the CPC program showcased the most robust results. For each dollar invested, society is projected to gain a return of $10.83. Now, that’s what you call an excellent investment!

But the benefits don’t stop there. When the researchers factored in the benefits from reductions in smoking, the returns soared to more than $12 per dollar invested. Even the school-age part of the program yielded substantial returns, with about $4 recouped for each dollar invested.

The Combined Impact of Preschool and School-age Programs

When the preschool and school-age programs were combined, the return on investment was even more impressive. The total return clocked in at a whopping $8.24 per dollar invested, translating into an annual rate of return of 18 percent. To put this in perspective, that’s higher than the average annual return of the stock market!

The Impact of Early Education on High-risk Groups

It turns out that children at higher levels of risk experienced the most significant economic benefits. These groups included males, children who had attended preschool for a year, and children from higher-risk families, such as those whose parents had not graduated from high school.

Key Principles of Effective Early Childhood Programs

The researchers identified five key principles that contributed to the success of the CPCs. These principles revolve around duration, intensity, class size, comprehensiveness, and the training and compensation of the staff.

Seizing the Opportunity

These findings have profound implications for policymakers and school superintendents. In an era where many states are considering scaling back on early childhood investments, this study provides compelling evidence to do just the opposite. By increasing access to effective programs like the CPCs, we’re not just investing in our children, but in the very fabric of our society.

So, the next time you think about investing, consider this: An investment in early childhood education may not make you personally richer, but it certainly contributes to a more prosperous and healthier society. Now, isn’t that a return worth investing in?

Arthur J. Reynolds, Judy A. Temple, Barry A. B. White, Suh-Ruu Ou, Dylan L. Robertson. Age 26 Cost-Benefit Analysis of the Child-Parent Center Early Education ProgramChild Development, 2011; 82 (1): 379 Link