The Economic Case for Investing in Young Children Rob Grunewald - - PowerPoint PPT Presentation

Rob Grunewald Federal Reserve Bank of Minneapolis

The Economic Case for Investing in Young Children

Minnesota’s Ranking in Per Capita Personal Income

• 1950s

27th

• 1970s

18th

• 1990s

16th

• 2014 15th

Minnesota’s Education Rises

Percent of Adult Population with a College Degree 5 10 15 20 25 30 35 40 1950 1960 1970 1980 1990 2000 2010 2014 Minnesota United States

Source: U.S. Census Bureau

Annual percent change in Minnesota labor force

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1990-00 2000-10 2010-15 2015-20 2020-25 2025-30

Source: Minnesota State Demographer

Hum an Brain Developm ent

Synapse Form ation Dependent on Early Experiences

FIRST YEAR

• 8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9

Birth (Months) (Years) Sensory Pathways (Vision, Hearing) Language Higher Cognitive Function

Source: Nelson (2000)

Human Brain at Birth 6 Years Old 14 Years Old

Source: Chugani, Phelps & Mazziotta (1987)

Barriers to Social Mobility Em erge at a Very Young Age

1 6 m os. 2 4 m os. 3 6 m os.

Cum ulative Vocabulary ( W ords)

College Educated Parents W elfare Parents

Child’s Age ( Months)

2 0 0 6 0 0 1 2 0 0

Source: Hart & Risley (1995)

Risk Factors for Adult Heart Disease are Em bedded in Adverse Childhood Experiences

ACEs

Source: Dong et al, 2004

Odds Ratio

1 2 3 4 5,6 7,8 0.5 1 1.5 2 2.5 3 3.5

Source: Minnesota Department of Health (2013)

Source: Minnesota Department of Health (2013)

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

0% 25% 50% 75% 100% Didn't require special education Graduated from high school on time Age 14 achievement at 10th percentile+ Program group No-program group

Source: Schweinhart, et al. (2005)

Perry: Economic Effects at Age 40

0% 25% 50% 75% 100% Have a savings account Earn $25,000+ Own home Program group No-program group

Source: Schweinhart, et al. (2005)

Perry: Arrested 5 or More Times Before Age 40

Source: Schweinhart, et al. (2005)

0% 20% 40% 60% No-program group Program group

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)

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%

Sources: Schweinhart, et al. (2005); Author’s calculations; Heckman, Moon, Pinto, Savelyez, & Yavitz (2010)

Benefit-Cost Ratios for Other Longitudinal Studies

• Abecedarian Educational Child Care

– $4 to $1

• Chicago-Child Parent

– $10 to $1

• Elmira Prenatal/Early Infancy Project

– $5 to $1

Sources: Masse & Barnett (2002); Reynolds, Temple, White, Ou, & Robertson (2011); Karoly, et al (1998)

Recent research findings

• State preschool program studies show positive gains

in emerging literacy and math skills

• Evaluations of Head Start and Early Head Start show

positive impact on development with mixed findings regarding persistence

• Analysis of program similar to Abecedarian for

children ages 1 to 3 shows reduction in achievement gap

• Michigan’s state preschool program associated with

stronger graduation rates

Lessons Learned from Research

• Invest in quality
• Involve parents
• Start early
• Reach vulnerable children and families
• Bring to scale

Minnesota Early Childhood Education Funding

$0 $10 $20 $30 $40 $50 $60 Early Learning Scholarships ECFE* School Readiness Head Start Millions FY2016 FY2017

*FY2016: $28 million state aid, $22.1 million local levy FY2017: $30.1 million state aid, $22.1 million local levy

Sources

Chugani, H.T., Phelps, M.E., & Mazziotta, J.C. (1987). “Positron emission tomography study

• f human brain functional development.” Annals of Neurology 22, 487-497.

Dong, M., Giles, W., Felitti, V.J., Dube, S.R., Williams, J.E., Chapman, D.P., & Anda, R.F. (2004). “Insights into causal pathways for ischemic heart disease: Adverse Childhood Experiences Study.” Circulation 110, 1761–1766. Hart, B., & Risley, T.R. (1995). Meaningful Differences in the Everyday Experience of Young American Children. Baltimore: Paul H. Brooks Publishing Co. Heckman, J. J., Moon, S.H., Pinto, R., Savelyez, P., & Yavitz, A. (2010). “The Rate of Return to the HighScope Perry Preschool Program.” Journal of Public Economics 94(1-2), 114-28. Karoly, L.A., Greenwood, P.W., Everingham, S.S., Hoube, J., Kilburn, M.R., Rydell et al. (1998). Investing in Our Children: What We Know and Don’t 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. New Brunswick, N.J.: National Institute for Early Education Research. Minnesota Department of Health. (2013). Adverse Childhood Experiences in Minnesota: Findings & Recommendations Based

• n the 2011 Minnesota Behavioral Risk Factor Surveillance System.

Nelson, C.A. (2000). Neural Plasticity and Human Development: The Role of Early Experience in Sculpting Memory Systems. Developmental Science 3, 115-130. Reynolds, A.J., Temple, J.A., Robertson, D.L., & Mann, E.A. (2002). “Age 21 Cost-Benefit Analysis of the Title I Chicago Child- Parent Centers.” Educational Evaluation and Policy Analysis 4(24), 267-303. Schweinhart, L.J., Montie, J., Xiang, Z., Barnett, W.S., Belfield, C.R., & Nores, M. (2005). Lifetime Effects: The High/Scope Perry Preschool Study Through Age 40. Ypsilanti, Mich.: High-Scope Press.

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