Transcript Slide 1

Wisconsin is Open for Business
ROI
of
ECL
Workforce development
and
economic development
are
interrelated and interdependent.
Ed = ED
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April 4, 2014
Wisconsin is Open for Business
ROI
of
ECL
April 4, 2014
WHAT IS
THE BEST ECONOMIC
INVESTMENT TOOL
AVAILABLE?
Wisconsin is Open for Business
EARLY EDUCATION
HUGE RETURN ON INVESTMENT
Welfare
ROI
Education
Earnings
Taxes paid
Crime
(Per participant in 2000 constant dollars discounted 3% annually)
of
ECL
$15,166
Benefits
Costs
$0
Total return = $258,888; $17.07 per dollar invested:
$12.90 to the public, $4.17 to participants
$50,000
$100,000 $150,000 $200,000
$250,000 $300,000
Larry Schweinhart, High/Scope Educational Research Foundation, www.highscope.org
April 4, 2014
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Wisconsin is Open for Business
HIGH/SCOPE PERRY PRESCHOOL
ECONOMIC EFFECTS
ROI
of
72%
Employed
62%
ECL
Earn > $2K/mo.
Own home
29%
7%
Program group
No-program group
36%
13%
76%
Had Savings Account
Never on welfare as
adult
0%
50%
41%
20%
10% 20%
30%
40% 50%
60% 70%
80%
Barnett, W.S. (1996). Lives in the balance: Benefit-cost analysis of the Perry Preschool Program through age 27. Monographs of the
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High/Scope Educational Research Foundation. Ypsilanti, MI: High/Scope Press. Graphic from National Institute for Early Education Research.
April 4, 2014
Wisconsin is Open for Business
ABECEDARIAN
ACADEMIC BENEFITS
ROI
of
ECL
31%
Special Education
49%
34%
Grade Repeater
65%
67%
HS Graduation
51%
36%
4 Yr College
0%
Program group
No-program group
13%
10%
20%
30%
40%
50%
60%
70%
80%
Barnett, W. S., & Masse, L. N. (2007). Early childhood program design and economic returns: Comparative benefit-cost analysis of the
Abecedarian program and policy implications, Economics of Education Review, 26, 113-125; Campbell, F.A., Ramey, C.T., Pungello, E.,
Sparling, J., & Miller-Johnson, S. ( 2002). Early childhood education: Young adult outcomes from the Abecedarian Project. Applied
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Developmental Science, 6(1), 42-57. Graphic from National Institute for Early Education Research.
April 4, 2014
Wisconsin is Open for Business
ECONOMIC RETURNS
TO EARLY INTERVENTION
ROI
of
(In 2002 dollars, 3% discount rate)
ECL
Cost
Benefits
B/C

Perry Pre-K
$15,386
$262,642
17.1

Chicago P/C
$ 7,384
$ 74,981
10.1

Elmira Prenatal
$ 7,109
$ 49,217
6.9

Abecedarian
$35,864*
$130,666
3.6

Nurse-Family
$ 9,118
$ 26,298
2.9
*Marginal cost, net or existing child care costs.
Barnett, W. S., & Masse, L. N. (2007). Early childhood program design and economic returns: Comparative benefit-cost analysis of the
Abecedarian program and policy implications, Economics of Education Review, 26, 113-125; Belfield, C., Nores, M., Barnett, W.S., &
Schweinhart, L.J. (2006). The High/Scope Perry Preschool Program. Journal of Human Resources, 41(1), 162-190; Temple, J. A., &
Reynolds, A. J. (2007). Benefits and costs of investments in preschool education: Evidence from the Child-Parent Centers and related
programs. Economics of Education Review, 26(1), 126-144.
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April 4, 2014
Wisconsin is Open for Business
WISCONSIN STUDY
FISCAL FLOWS IN K-12
ROI
of
ECL
• Title
The Economic Returns to Wisconsin’s
Education System from Investment in
Four-year-old Kindergarten
• Sponsors
Trust for Early Education
The Pew Charitable Trusts
Pre-K Now
• Authors
Professor Clive R. Belfield
Queens College, CUNY
http://dpi.wi.gov/ec/ec4yrpag.html
Dennis K. Winters
NorthStar Economics, Inc.
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Wisconsin is Open for Business
WISCONSIN STUDY
EXPANDED COSTS & BENEFITS
ROI
of
ECL
BENEFIT/COST ANALYSIS
Present Value Figures($ million)
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
Results
Investment (COST)
$206.90
Total School System Savings (BEN)
$140.96
OTHER BENEFITS
Tax Revenue Gains
48.44
Criminal Justice System
142.18
Health Expenditures Savings
7.00
Total Other Benefits
$197.62
Grand Total Benefits
$338.58
Net Fiscal Impact (BEN-COST)
$131.68
Benefit–Cost Ratio (BEN/COST %)
1.64
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Wisconsin is Open for Business
FISCAL COSTS & BENEFITS
PERSPECTIVE
ROI
of
ECL
• $66 million < 1% of State Education Budget
• Huge Returns to Individual and Society
• Imperative to Workforce Development
• Imperative to Economic Development
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Wisconsin is Open for Business
WHAT MORE DO YOU NEED?
THE QUESTIONS HAVE BEEN ANSWERED
ROI
of
ECL
 What is the greatest job need?
 Skilled, creative, interactive occupations
 What are the returns?
17: 1 returns; 80% to the Public
 Is it fiscally prudent?
 Tiny fraction of total public school funding
 What is your alternative investment?
 Not a new mall !
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Wisconsin is Open for Business
WHY EARLY EDUCATION?
AN EARLY FULCRUM
ROI
of
ECL

Third Grade Reading Skills
 Learn to Read
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Read to Learn
Wisconsin is Open for Business
ACHIEVEMENT GAP
ESTABILISHED EARLY
ROI
of
ECL
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Wisconsin is Open for Business
ACHIEVEMENT GAP
DEPENDENT ON THE MOTHER’S EDUCATION
ROI
of
ECL
Source: Prof. James Heckman, Nobel Laureate, University of Chicago
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Wisconsin is Open for Business
POVERTY v. EDUCATION
USE THE CORRECT POLICIES
ROI
of
ECL
 Ed
≠ f (Poverty)
 Poverty
April 4, 2014
= f (Education)
Wisconsin is Open for Business
WHAT THEY SAY
ROI
of
ECL
“By 5, it is possible to predict, with
depressing accuracy, who will complete high
school and college and who won't.”
– David Brooks,
David Brooks: Schools and Skills
The New York Times; Editorial
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April 4, 2014
Wisconsin is Open for Business
ROI
of
ECL
Questions ?
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April 4, 2014
Wisconsin is Open for Business
ROI
CONTACT INFORMATION
of
ECL
 Dennis Winters
 Phone: 608-267-3262
 Email: [email protected]
 Website: www.dwd.wisconsin.gov
 OEA website: www.dwd.wisconsin.gov/oea
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April 4, 2014