Transcript No Slide Title

The Economic Case for
Investments in Young
Children
Rob Grunewald
Federal Reserve Bank of Minneapolis
Human Brain Development
Synapse Formation Dependent on Early Experiences
Language
Sensory Pathways
(Vision, Hearing)
Higher Cognitive Function
FIRST YEAR
-8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Birth
(Months)
(Years)
Source: C. Nelson (2000)
Cumulative Vocabulary (Words)
Barriers to Social Mobility Emerge
at a Very Young Age
1200
College Educated
Parents
600
Welfare
Parents
200
16 mos.
24 mos.
36 mos.
Child’s Age (Months)
Source: Hart & Risley (1995)
Risk Factors for Adult Substance Abuse are
Embedded in Adverse Childhood Experiences
Self-Report: Alcoholism
Self-Report: Illicit Drugs
40
16
%
14
%
35
12
30
10
25
8
20
6
15
4
10
2
5
0
0
0
1
2
Source: Dube et al, 2002
3
4
ACEs
0
1
2
Source: Dube et al, 2005
3
4
5+
Risk Factors for Adult Heart Disease are
Embedded in Adverse Childhood Experiences
Odds Ratio
3.5
3
2.5
2
1.5
1
0.5
0
1
2
3
4
ACEs
5,6
7,8
Source: Dong et al, 2004
High/Scope Study of Perry Preschool
•
In early 1960s, 123 children from low-income
families in Ypsilanti, Mich.
•
Children randomly selected to attend Perry or
control group.
•
High-quality program with well trained teachers,
daily classroom sessions and weekly home
visits.
•
Tracked participants and control group through
age 40.
Perry: Educational Effects
Source: High/Scope Educational Research Foundation
Perry: Economic Effects at Age 40
Own home
Earned $25,000+
Have a savings
account
0%
25%
50%
Program group
75%
100%
No-program group
Source: High/Scope Educational Research Foundation
Perry: Arrested 5 or More
Times Before Age 40
Source: High/Scope Educational Research Foundation
Perry: Average Number of Months
Served in Prison by Age 40
Source: High/Scope Educational Research Foundation
Perry Preschool
Costs and Benefits Over 62 Years
Program Cost
K-12 Ed
Higher Participants' Earnings
Justice System
Crime Victims
For Public
Source: High/Scope Educational
Research Foundation
$140,000
$100,000
$60,000
$20,000
-$20,000
Welfare Payments
For Participant
Perry Preschool —
Estimated Return on Investment
•
Benefit-Cost Ratio = $16 to $1
•
Annual Rate of Return = 18%
•
Public Rate of Return = 16%
•
Heckman Reanalysis: 10%
Benefit-Cost Ratios for
Other Longitudinal Studies
•
Abecedarian Educational Child Care
– $4 to $1
•
Chicago-Child Parent
– $7 to $1
•
Elmira Prenatal/Early Infancy Project
– $5 to $1
Short-Run Benefits
•
Allow parents to enter workforce
•
Reduce absenteeism and turnover
•
Attract businesses
Lessons Learned from Research
•
Invest in quality
•
Involve parents
•
Start early
•
Reach at-risk population
•
Teach cognitive and noncognitive skills
•
Bring to scale
Moving Forward
•
Prenatal/early infant home visits for at-risk mothers
•
Access to health care
•
Parent education
•
Quality child care
•
Access to preschool
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