Download - Investments in Young Children Robert Grunewald

8/12/2019 Investments in Young Children Robert Grunewald

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Rob Grunewald

Federal Reserve Bank of Minneapolis

Investments in Young Children:

The Economic Case and

How to Fund

July 18, 2011

CCSSO Summer Institute


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Economic Case and

How to Fund

Early childhood development is economic development

Early investments yield a high public return

States use a variety of funding sources

Education chiefs play key role in moving agenda forward


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Investments in Young Children:Economic Case and

How to Fund






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0.0

0.2

0.4

0.6

0.8

1.0

1.2

2000-10 2010-15 2015-20 2020-25 2025-30 2030-35 2035-40 2040-45 2045-50

Average

annualperc

entchange

U.S. Population Projections,

Ages 15 to 64

Source: U.S. Census Bureau, Population Division


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0.0 0.5 1.0 1.5 2.0

Short-term OTJ training

Moderate-term OTJ

training

Long-term OTJ training

Work experience inrelated occupation

Postsecondary vocational

award

Associate degree

Bachelor's degree orhigher

Average annual percent change

Occupation Growth by Primary Source of

Education and Training, 2008 to 2018

Source: U.S. Bureau of Labor Statistics, Employment Projections Program


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$0 $20,000 $40,000 $60,000 $80,000

Short-term OTJ training

Moderate-term OTJ training

Long-term OTJ training

Work experience in related occupation

Postsecondary vocational award

Associate degree

Bachelor's degree or higher

Average annual wages of new jobs based on median 2008 wages

Average Annual Wages of New Jobs by Primary

Source of Education and Training, 2008 to 2018

Source: U.S. Bureau of Labor Statistics, Employment Projections Program


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How to Fund






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Human Brain DevelopmentSynapse Formation Dependent on Early Experiences

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)

Sensory Pathways(Vision, Hearing)

LanguageHigher Cognitive Function

Source: Nelson (2000)


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HumanBrain

at Birth

6 Years Old14 Years

Old

Source: Chugani, Phelps & Mazziotta (1987)


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Barriers to Social Mobility Emergeat a Very Young Age

16 mos. 24 mos. 36 mos.

CumulativeVocabula

ry(Words)

College EducatedParents

Very Low-IncomeParents

Childs Age (Months)

200

600

1200

Source: Hart & Risley (1995)


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High/Scope Study of Perry Preschool In early 1960s, 123 children from low-income

families in Ypsilanti, Mich.

Children randomly selected to attend Perry orcontrol group.

High-quality program with well-trained teachers,daily classroom sessions and weekly home

visits.

Tracked participants and control group throughage 40.


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Perry: Educational Effects

0% 25% 50% 75% 100%

Didn't requirespecial education

Graduated from highschool on time

Age 14 achievementat 10th percentile+

Program group No-program group

Source: Schweinhart, et al. (2005)


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Perry Preschool

Costs and Benefits Over 62 Years

-$20,

000

$20,

000

$60,

000

$100,

000

$140,

000

Welfare Payments

Crime Victims

Justice System

Higher Participants' Earnings

K-12 Ed

Program Cost

For Public For Participant

Source: Schweinhart, et al. (2005)


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Perry PreschoolEstimated Return on Investment

Benefit-Cost Ratio = $16 to $1

Annual Rate of Return = 18%

Public Rate of Return = 16%

Heckman Reanalysis = 10%

Sources: Schweinhart, et al. (2005); Authors calculations; Heckman, Moon,

Pinto, Savelyez, & Yavitz (2010)


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Five-State Pre-K EvaluationEstimated size of intent-to-treat effect

-0.2

0.0

0.2

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1.0

1.2

Michigan New Jersey SouthCarolina

West Virginia Oklahoma

Vocabulary (PPVT) Math Print Awareness

*Significant at 5% Source: Wong, V. C., Cook, T. D., Barnett, W. S., & Jung, K. (2008)

*

*

**

*

*

*

**


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Lessons Learned from Research Invest in quality

Involve parents

Start early

Reach at-risk population

Bring to scale


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How to Fund Early childhood development is economic development





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Funding Pre-K

General revenue

School funding formula At least 11 states and D.C.

Community programs can provide preschool

Designated sales or excise tax South Carolina and Denver: Sales tax

California and Arizona: Cigarette tax

Lottery Georgia raises about $300 million


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Set aside Pre-K funds for ages 0 to 3

Illinois and Kansas

Endowment Nebraska, $60 million

Public-Private Partnerships

Smart Start (North Carolina) Smart Beginnings (Virginia)

Minnesota Early Learning Foundation

Funding Prenatal to Age 3


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Economic Case and

How to Fund Early childhood development is economic development





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Roles for Education Chiefs Advocate for early childhood funding

Partner with Human Services and Health Departmentsto improve program quality

Encourage schools to partner with child care, Pre-Kand Head Start to improve transition to kindergarten

Apply for Early Learning Challenge funds to build astronger state early learning system

Promote partnerships with the private sector


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Sources

Chugani, H.T., Phelps, M.E., & Mazziotta, J.C. (1987). Positron emission tomography studyof human brain functional development.Annals of Neurology22, 487-497.

Hart, B., & Risley, T.R. (1995). Meaningful Differences in the Everyday Experience of Young American Children.

Baltimore: Paul H. Brooks Publishing Co.

Karoly, L.A., Greenwood, P.W., Everingham, S.S., Hoube, J., Kilburn, M.R., Rydell, C.P., et al. (1998). Investing in OurChildren: What We Know and Dont Know About the Costs and Benefits of Early Childhood Interventions. Santa Monica,Cal.: RAND Corporation.

Masse, L.N., & Barnett, W.S. (2002).A Benefit-Cost Analysis of the Abecedarian Early Childhood Intervention. NewBrunswick, N.J.: National Institute for Early Education Research.

Heckman, J. J., Moon, S.H., Pinto, R., Savelyez, P., & Yavitz, A. (2010). The Rate of Return to the HighScope PerryPreschool Program. Journal of Public Economics94(1-2), 114-28.

Minnesota Early Learning Foundation. www.melf.us.

Nelson, C.A. (2000). The Neurobiological Bases of Early Intervention. In J.P. Shonkoff & S.J. Meisels (Eds.), Handbook ofEarly Childhood Intervention, second edition (204-227). Cambridge, Mass.: Cambridge University Press.

Reynolds, A.J., Temple, J.A., Robertson, D.L., & Mann, E.A. (2002) Age 21 Cost-Benefit Analysis of the Title I ChicagoChild-Parent Centers. Educational Evaluation and Policy Analysis4(24), 267-303.

Schweinhart, L.J., Montie, J., Xiang, Z., Barnett, W.S., Belfield, C.R., & Nores, M. (2005) Lifetime Effects: The High/ScopePerry Preschool Study Through Age 40. Ypsilanti, Mich.: High-Scope Press.

U.S. Census Bureau, Population Division. Population Projections. http://www.census.gov/population/www/projections/.

U.S. Bureau of Labor Statistics, Employment Projections Program. http://www.bls.gov/emp/.

Wong, V. C., Cook, T. D., Barnett, W. S., & Jung, K. (2008). An Effectiveness -based Evaluation of Five StatePrekindergarten Programs. Journal of Policy Analysis and Management, 27(1), 122-154.


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minneapolisfed.org