Principal investigator: Angelo Cruz do Nascimento Varella
Article title: THE RATE OF RETURN TO THE HIGHSCOPE PERRY PRESCHOOL PROGRAM
Article authors: James J. Heckman; Seong Hyeok Moon; Rodrigo Pinto; Peter A. Savelyev; Adam Yavitz;
Location of the intervention: Perry Elementary School, in the city of Ypsilanti, Michigan, in the United States.
Sample size: 123 students
Main theme: Education
Primary variable of interest: Internal Rate of Return (IRR) of investments in early childhood education from the HighScope Perry Program.
Type of intervention: Calculation of the Internal Rate of Return (IRR) and other socioeconomic benefits from the HighScope Perry program for early childhood education.
Evaluation method: Others
Policy Problem
Investments in early childhood education are considered effective ways to reduce social inequality, as well as its consequences and harms, in addition to efficiently fostering economic development. It is worth highlighting that data transparency and the monitoring of social and educational programs are useful tools in this process and allow for the investigation of the real effects that public spending on early childhood education actually generates for a country's society and economy.
In the United States, the economic argument in favor of investing in early childhood education is based on a social experiment called... HighScope Perry Preschool Program, an educational support program for children with cognitive difficulties and in precarious socioeconomic situations.
Despite numerous studies indicating social and individual benefits from the program, some researchers question the positive results obtained from the experiment, arguing that there were problems with the program's implementation and subsequent data collection.
Thus, to further the debate and ascertain whether the program's impacts were truly positive, the authors of this research conducted several statistical tests to ensure that the data and calculations of return on investment are indeed reliable and robust.
Implementation and Evaluation Context
The Early Childhood Education Program HighScope Perry was created in the early 1960s to serve students at Perry Elementary School in Ypsilanti, Michigan, in the United States. The program's aim was to identify children with poor cognitive and socioeconomic conditions in order to provide supplementary support to their early childhood education.
The program's curricular activities were geared towards the cognitive, emotional, and social development of the selected children, through specialized techniques designed to strengthen active learning. To this end, designated teachers and their families encouraged participating children to plan and reflect on daily activities according to a pre-established process. The children were encouraged to make choices, solve problems, and engage in activities and tasks, focusing on reflective reasoning and logical questioning.
Policy/Program Details
Selection for the program occurred through a research process involving teachers, researchers, and families associated with Perry Primary School. Based on the collected data, a family socioeconomic index was developed, in addition to Intelligence Quotient (IQ) tests administered to the children. Thus, children living in adverse conditions and who scored between 70 and 85 points on the IQ test were considered disadvantaged, identifying five groups of children eligible to participate.
After identifying eligible participants, control and treatment groups were randomly created to ensure the quality of the experiment. The control groups were evaluated without participating in the program, while the treatment group consisted of children who received educational investments through classes and supplementary activities.
Following the educational intervention and the auxiliary classes and procedures, the children from both groups were monitored and evaluated throughout their lives. Socioeconomic questionnaires were administered to all participants at the beginning and end of the program, as well as at ages 15, 19, 27, and 40, encompassing aspects of their life trajectories, including schooling, economic activities, marital life, children's education, and criminal records. Additionally, the project also gathered administrative data and public records from schools, police, courts, and social assistance programs.
The Assessment Method
The project HighScope Perry generated a vast array of data, which has been analyzed by numerous researchers over time. Consequently, there has been a heated debate in the academic literature regarding the results obtained and the limitations of this research and the program. Thus, the researchers in this work supplemented this rich database with current data and modern statistical tests to robustly confirm the results obtained.
The researchers' main objective was to measure the Internal Rate of Return (IRR) of the program's investments. To do this, they considered the amounts invested in the program and the individual and societal returns. The IRR is a financial analysis metric that determines the annual discount rate that equalizes the costs and benefits of a given investment in present values. In simpler terms, the IRR is a parameter that shows how much better an investment is compared to another safe, low-yield investment. Thus, the higher the IRR, the better the investment in question.
In addition to the IRR, the cost-benefit ratio of the program was also calculated in terms of return to society, so that the results demonstrate the proportion of benefits generated in relation to the costs of the investments.
Main results
The results show that investments in early childhood education generate individual and collective benefits. Not only were the rates of return positive, but the cost-benefit ratios and reductions in social ills, such as crime rates, were better in the treatment groups compared to the control groups.
On average, the program's IRR was measured within the range of 7% to 10% across the different groups. This means that, on average, for every dollar invested in the program, there was an increase in the estimated return of approximately $60 to $300 over the participant's lifetime, up to the age of 65. This, obviously, is in addition to the results observed for the control group, which constitutes a favorable argument for this type of investment in early childhood education.
Furthermore, the cost-benefit ratio for society was measured in the range of 7 to 12 dollars, based on a discount rate of 3%. In other words, for every dollar invested in the program, there was an extra gain for society in the order of 7 to 12 dollars, through social benefits and tax revenue. It is also worth highlighting that socioeconomic, educational, and crime parameters also showed considerable improvements in the groups served by the program's activities.
Lessons in Public Policy
The study indicates that implementing early childhood education assistance initiatives, similar to the HighScope Perry program, is beneficial to the individuals involved and to society as a whole. Virtually all indicators were positive, showing financial and social gains, improved living conditions, and reduced crime among participants. Therefore, it can be stated that it is advisable to replicate not only the program in question in other locations and circumstances to obtain increasingly robust results, but also to improve monitoring and data collection systems in order to address problems observed in the program and to continue improving and enhancing the initiative and subsequent research.
Reference
HECKMAN, James J. et al. The rate of return to the HighScope Perry Preschool Program. Journal of public economics, v. 94, no. 1-2, p. 114-128, 2010.
