Responsible Researcher: Bruno Benevit
Original title: The Dynastic Benefits of Early Childhood Education
Authors: Jorge Luis García, Frederik H. Bennhoff, Duncan Ermini Leaf and James J. Heckman
Location of the Intervention: United States
Sample Size: 123 children
Sector: Education
Primary Variable of Interest: Cost-benefit analysis of the program
Type of Intervention: Educational assistance
Methodology: OLS, AIPW, LASSO, Probit
Summary
The problem of social mobility for African American children represents a persistent social problem in the United States. Establishing policies aimed at changing this context is essential, especially those focused on education. In this sense, several studies have investigated the effects of... Perry Preschool ProjectThis study, focused on the educational development of African American children in vulnerable social situations, analyzed the program's effects on indicators of education, income, crime, and health throughout the lives of the children treated, in addition to presenting several cost-benefit analyses. The study also presents new evidence related to the effects of early childhood education programs on family members. The results indicate that the program led to improvements in all indicators, as well as demonstrating cost-effectiveness. The same effects were identified for the children and siblings of the original participants treated.
- Policy Problem
The problem of social mobility for African American children represents a persistent social problem in the United States. Establishing policies aimed at changing this context is essential, especially those focused on education. In this sense, several studies have investigated the effects of the program. Perry Preschool Project (PPP) in the social mobility of African-American children in situations of social vulnerability.
According to Elango et al. (2016), at least 30% of early childhood education programs in the United States were based on PPP, highlighting the program's relevance. This type of program has the potential to improve several factors associated with participants' social mobility, such as education, income, involvement in crime, and health. Thus, understanding the long-term effects on participants of this type of program provides relevant information for cost-benefit analysis and for the formulation of new policies aimed at development and social mobility.
- Implementation and Evaluation Context
The PPP was conducted in Ypsilanti, Michigan, and was designed to stimulate the development of cognitive and non-cognitive skills in socially disadvantaged African American girls during the early 1960s. The program intervention consisted of 2,5-hour weekday preschool sessions held over two years, beginning at age three. Additionally, participants also received weekly home visits from teachers during the two-year treatment period. No treatment was conducted for the children in the control group, and there were no treatment substitutes available in their area.
The group of participants in the PPP were representative of the disadvantaged African American population in the United States, and included 123 socially disadvantaged African American children. According to Heckman et al. (2010), 15% of African American women and 17% of African American men born in the United States during the 1960s would have been eligible to participate in the PPP. The authors estimate that these percentages represent 10% for both men and women in 2021.
- Policy/Program Details
The PPP randomly selected 123 socially disadvantaged African American children into treatment and control groups across five cohorts during the early 1960s. Participant eligibility criteria were based on IQ scores and socioeconomic status from school surveys, referrals, and visits. Participants in the treatment and control groups were followed through multiple rounds of data collection until age 54. At the age 54 follow-up, when data on the siblings and adult children of the original participants were collected, 83% of the 123 participants were interviewed; 12% of participants were not interviewed because they had died.
The learning process involved planning, execution, and reflection activities guided by the teachers. The students and teachers belonged to the catchment area served by Perry Elementary School in Ypsilanti, Michigan. The teachers produced reports on the process. In terms of values in 2017, the program had a total cost of US$21.151 per participant (Barnett, 1996), including operational costs (teacher and administrative salaries) and capital costs (classrooms and facilities). This value was used as the basis for the cost-benefit analyses in this article.
- Method
The sample used was constructed from data collected from PPP participants in interviews conducted, on average, at ages 15, 19, 27, 40, and 54. In addition to the participants, the interviews also collected data regarding their siblings and children (up to 5 older) in the interview conducted at age 54. Only siblings born before the implementation of the treatment and within a 5-year age difference of the original program participant were considered. The data presents information about the children regarding socioeconomic aspects, IQ at age 3 (at the start of the program), education, income, involvement in crime, and health.
The study assesses how participants who underwent the intervention were affected throughout their life cycle in terms of education, income, involvement in crime, and health. To provide greater robustness to the findings, the econometric methods of Ordinary Least Squares (OLS), Augmented Inverse Probability Estimator (AIPW), Least Absolute Shrinkage and Selection Operator (LASSO), and Probit were applied.
To evaluate the cost-benefit of the program, the authors created an aggregation variable of the aggregate benefits throughout the participants' life cycle, based on the variables of interest listed above. The authors adopted several approaches present in the related literature for each topic to compute the aggregate benefit of each variable of interest (García). et al., 2021). Based on these calculations, the ratio between the value of this aggregation variable and the cost of the program was considered in two ways: (i) considering the cost directly, equivalent to $21.151 in 2017, and (ii) considering the cost by multiplying the amount of $21.151 by 1,5, in order to account for the 50% efficiency loss resulting from tax collection for financing the program.
The study's main analysis presented estimates of the intervention's cost-benefit effects for each variable of interest related to education, income, crime, health, and total effects for PPP participants. Values in 2017 US dollars were considered, and discounts were applied for the year the program began using a 3% rate.
The authors also conducted a series of robustness tests used to verify the validity of the identified results, considering different estimation methods, optimistic and pessimistic scenarios regarding the costs considered, and alternative ways of measuring the benefit resulting from the program intervention.
Finally, the study presented a cost-benefit analysis for the participants in the treatment group, their siblings, their children, their "dynasty" (original participant and their children), and their "extended dynasty" (original participant, their children, and their siblings). Due to the age of the participants' children, no health analyses were performed.
- Main results
The results of the main analysis demonstrated that treated individuals received fewer years of special education and grade retention in basic education (elementary and secondary), in addition to showing an increase in years of formal education. Due to the increase in productivity caused by this improvement in human capital, the higher incomes of the treatment group generated an increase in the tax base of income collected. According to the authors, there was an average income benefit of $43,4 (after taxes). Greater effects were identified for women in income compared to men.
Regarding the effects on participation in crime, the results indicated that treated participants engaged in less crime, implying a reduction in criminal justice costs and monetary costs for victims in the order of $79,3.
Regarding the impact on health variables of interest, the estimates showed an increase in healthcare spending in the treated group. These increases occur for both private and government medical spending. This behavior can be explained by the increase in income earned by this group, such that better health conditions significantly outweigh healthcare costs (García). et al.( , 2021). Additionally, besides the increases in healthcare spending, the improved health behavior of those treated leads to a lower mortality rate at age 54.
Considering the benefits derived from education, labor income, criminal justice system costs, healthcare system costs, and victimization costs due to crime, the results identified that the intervention provided a significant cost-benefit ratio between 6,0 and 9,0 (considering and not considering the loss of efficiency, respectively). The results maintained their validity after conducting robustness tests.
The analysis of the "dynasties" revealed that there was a spillover of the positive treatment effect to the children and siblings of the treated participants. The children and siblings of the treated participants showed higher spending on education, a behavior resulting from their higher education, similar to that observed in relation to health. As in the main analysis, these effects are offset by increases in family income. Analogous results to those identified in the main analysis were also identified in relation to the criminal behavior of the family members of the original participants. In total, the benefits for the children and siblings add $32,7 and $60,6 to the program benefit, respectively. The present value over the lifetime of the "extended dynasty" of the program increases to $286, implying a significant cost-benefit ratio between 13,5 and 9,0 (considering and not considering the loss of efficiency, respectively).
- Lessons in Public Policy
This article examined how the PPP social development policy impacted African American children in situations of social vulnerability. Indicators of education, income, participation in crime, and health were observed throughout the lives of program participants to estimate the impact and cost-benefit of the program, as well as its intragenerational and extragenerational effects.
The results present robust evidence that the program was effective in improving all estimators, as well as demonstrating cost-effectiveness and return. Furthermore, the article presented new findings regarding the impact of an early childhood education program on the families of the original participants. This evidence highlights the importance of development-oriented policies and their lasting effects at the individual and family levels.
References
BARNETT, WS Lives in the balance: age 27 benefit-cost analysis of the High/Scope Perry Preschool Program. Ypsilanti, Mich: High/Scope Press, 1996.
ELANGO, S. et al. Early Childhood Education. Em: Economics of Means-Tested Transfer Programs in the United States, Volume 2. [sl] University of Chicago Press, 2015. p. 235–297.
GARCÍA, JL et al. The Dynastic Benefits of Early Childhood EducationCambridge, MA: National Bureau of Economic Research, July 2021. Available at: Accessed on: June 13, 2023.
HECKMAN, J.; MOON, SH; PINTO, R. Analyzing social experiments as implemented: A reexamination of the evidence from the HighScope Perry Preschool Program. Quantitative Economics, v. 1, no. 1, p. 1–46, 2010.
