Early Childhood Investments

Back in the 1990s I was studying early childhood development.  I was intrigued by research that I read by Art Rolnick, then Senior Vice President and Director of Research at the Minneapolis Federal Reserve, that showed the positive pay off for investment in early childhood education programs.  As we talk about major expense categories in state and local government, it made me wonder where Minnesota currently stands in terms of funding this critical developmental period in the life of our residents.  I was also interested because the Democrats in the Minnesota House are proposing a plan for improving public education.  Part of this plan includes $50 million in funding for preschool. 

According to Rolnick and Rob Grunewald, early childhood development programs are rarely portrayed as economic development initiatives, but they should be.  If children have support in developing cognition, language, motor and socio-emotional skills, they will be more likely to be productive citizens and less likely to drop out of school, receive welfare benefits and commit crimes.  As an example, the table below (from a study in their article) shows the economic benefit over time.

 

 

Perry School Preschool's Estimated Impact per Program Participant, Benefit/Cost Analysis

 

Published March 1, 2003  |  March 2003 issue

Present Value in 1992 Dollars Discounted at 3%
Benefits*	For Participant	For Public	Total
Child care provided	738	0	738
More efficient K-12 education, such as less grade retention and higher achievement	0	6,872	6,872
Decrease in public adult education costs	0	283	283
Increase in participants' earnings and employee benefits	21,485	8,846	30,331
Decrease in crime	0	70,381	70,381
Increase in publicly funded higher education costs	0	-868	-868
Decrease in welfare payments	-2,653	2,918	265
Total Benefits	19,570	88,433	108,002
Cost of Program	0	-12,356	-12,356

*Benefits and costs were measured from ages 3 through 27 and
projected for ages 28 through 65.

Data Source: The High/Scope Perry Preschool Study Through Age 27

According to the map published in the Trends in America by the Council of State Governments, Minnesota ranks low in terms of support for 4 year olds, although we have plenty of company at the low end. According to the map, 9 states did not have any programs to serve children age 4 and 28 states, Minnesota included, served fewer than 20% of children age 4.  While the data is a few years old (2007), not much has changed.  According to the 2012-2013 Minnesota Biennial Budget, the budget category for Early Childhood and Family Support represents less than 1% of the total state education budget.  Even with the proposed increase of $50 million it doesn’t rise to the 2% mark.  


It is hard for legislators to take the long view since they want to show good investments within their time as elected representatives, but data supports that an investment in the early years will allow us to save money on other costs down the road.  I like the concept of an affordable (subsidized) preschool as an economic investment.  It is an investment I’d be willing to pay for.