Universal Preschool: How It Would Impact Your Family—and the Economy

Universal Preschool: How It Would Impact Your Family—and the Economy

In his State of the Union address, President Barack Obama proposed making high-quality preschool available to all children in the United States.

"Every dollar we invest in high-quality early education can save more than seven dollars later on—by boosting graduation rates, reducing teen pregnancy, even reducing violent crime," he said.

Since then, the pundits have been scrutinizing whether such education for youngsters actually has substantial benefits.


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In fact, a number of studies show that there are long-lasting benefits. But, as it goes when studying something as intangible as the long-term effects of preschool, other studies seem to indicate that the advantages of a preschool education fade by third grade.

While the proposal is still in the early stages of being sketched out—the administration hasn't yet detailed how it plans to pay for the program, though it could do so in Obama's budget, expected in March—we dive into the numbers to see whether this investment by society is a waste of money or boon to us all.

Obama's Proposal

In the State of the Union, Obama said, "Tonight, I propose working with states to make high-quality preschool available to every child in America," but his proposal is actually more limited. It aims to provide federal matching dollars to states to provide public preschool to all four-year-olds from families with incomes at or below 200% of the poverty limit, which for a family of four would be $47,100. States who expand public pre-K slots to middle-class families would be eligible for more funding, and those families would pay tuition rates based on a sliding scale. 

RELATED: Obama's State of the Union Address: What You Need to Know

As Sara Watson, director of Ready Nation, a group of business leaders that supports early childhood policies, said, his plan targets "families who are the working poor—ones who are working but at minimum-wage jobs. They make too much to qualify for Head Start"—a federal program that offers education, health, nutrition and parent involvement services to support low-income children and their families—"but not enough to pay for preschool."

The president's proposal could also have an effect on the quality of preschool education. His plan will take some cues from an Alabama program that requires preschools to employ teachers with bachelor’s degrees in early childhood education or child development, to have class sizes of less than 20 children, and to follow a state-approved curriculum.

Additionally, although much of the attention has been on his preschool proposal, Obama actually intends to address a whole spectrum of issues from birth through kindergarten entry. He also plans to:

  • Invest in a new "Early Head Start-Child Care partnership" that would expand and improve early learning programs for infants and toddlers.
  • Expand voluntary home-visiting services that allow nurses, social workers and other professionals to connect families to services aimed at improving a child's health, development and ability to learn. 

Watson says of home visiting, "highly trained professionals work with expectant and new parents to teach them to be great nurturers of their children. They learn how to soothe them, nurture them, teach them and read to them from a very early age. Those seemingly simple parenting actions make a big difference in children being able to learn."

Why Preschool?

Obama said one reason he intended to invest in preschool was that every dollar invested could save seven dollars both in terms of reduced public costs for crime, health care and other expenses, as well as increased revenue in the form of tax payments later on. This figure comes from a study of Chicago pre-K programs, one of the three biggest to explore the cost-benefit ratio of preschool.

The Chicago Longitudinal Study analyzed a preschool program run by the Chicago public schools and served more than 1,400 students. According to a 2011 update on the students, who completed kindergarten in 1986, "those who had participated in an early childhood program beginning at age 3 showed higher levels of educational attainment, socioeconomic status, job skills and health insurance coverage as well as lower rates of substance abuse, felony arrest and incarceration than those who received the usual early childhood services."

Watson says preschool programs have three kinds of positive consequences:

  1. Benefits to the children: As they grow up, they perform better in school overall. They are also less likely to be placed in special education, held back, get pregnant as a teen and commit crimes, plus more likely to graduate, have a bank account, go to college and become employed.
  2. Benefits to the government: Such children have higher incomes, perform less crime, are less likely to be on welfare and less likely to abuse substances, which means that they pay higher taxes and cost society less.
  3. Benefits to society in general: These effects are less tangible, but range from less crime in society to more graduates to kindergarten classes that can start off quickly because the students already know their ABCs, 123s, and also how to behave.

RELATED: 6 Old-School Habits to Ensure You Raise a Successful Kid

How Big Are the Economic Benefits?

Obama's $7 in savings per dollar invested figure is on the conservative end of many different estimates of projected savings. An exact number is hard to pin down, because calculating the amount saved depends on how the economist conducting any one study values particular outcomes. For instance, what dollar amount value would you put on having a preschool aged child get a job 15 years from now? Because of differences in those numbers, some estimates go as high as $17 saved for ever dollar invested in preschool education.

RELATED: 8 Little Investments in Your Kids That Pay Big Dividends

Regardless of what the exact figure is, there are two important caveats to note: First, these projected savings come from dollars invested in preschool education that targets disadvantaged children, as those were the populations targeted in the major studies. Presumably, the effect would be less for, say, middle-class children.

[lv_share_bricks]Second, critics of investment in preschool education say that the benefits of preschool education fade. Lindsey Burke, a fellow in education policy at the conservative Heritage Foundation, in an interview with The Wall Street Journal pointed to a recent report from the U.S. Department of Health and Human Services, which is responsible for Head Start, that showed that the advantages shown by Head Start children faded by third grade. She said she wasn't "optimistic that any federal expansion of preschool will look any different from this failed program." (The study did, however, find that parents reported that their children behaved better.)

Watson says one reason that the benefits seem to fade early is that students who did not attend preschool can "catch up" to their peers, but it's often because the school has spend money in helping to bring them up to speed. "Also, there's evidence that some things that are easy to measure like academic scores might fade out," she says, "but the social and emotional development and skills that aren't so easy to measure do persist over time—and that's what gets kids to persevere and graduate from high school."

As James J. Heckman, a University of Chicago professor who has extensively studied the economic benefits of preschool education put it in The New York Times, "every dollar invested in quality early childhood development for disadvantaged children produces a 7 percent to 10 percent return, per child, per year." As many investors would say, this is a return that we could be happy with.


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