Early Childhood Investments

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As states look to trim budgets and focus on programs that have proven results, early childhood programs have shown high return on the investment of taxpayer dollars on long-term nonacademic indicators.

Nobel Laureate James Heckman cites data that show early interventions such as high quality early care and education programs provide greater return on investment than high school and post school interventions and are on average much less costly.1

A 2012 report by the Annie E. Casey Foundation suggests that if a child starts kindergarten behind, it can be incredibly hard for them to catch up. Early childhood education and preschool help children who are behind catch up to their peers. A child who is behind in kindergarten is likely to be behind at third grade and less likely to graduate high school. A child who is not reading at grade level by third grade is four times less likely to graduate high school than their peers who are reading at grade level by third grade.2

States were eligible for federal funding to establish early childhood state advisory councils through the 2009 American Recovery and Reinvestment Act. These councils were federally required through the Head Start Reauthorization Act of 2007, but until funding became available in 2009, there was little action taken by states. Early childhood state advisory councils were convened in 45 states and territories and were charged with researching the availability and quality of early childhood care and education programs in their states. The councils also were charged with increasing participation in early childhood education and care programs. Advisory councils provided states the opportunity to research the quality and availability of early childhood services for their citizens and to look at data collection and research the return on investments of state early childhood programs.3

According to Heckman, early childhood investments pay dividends for the life of the child. Each $1 invested returns $60 to $300 over a child’s lifetime.4

In the 2015-16 budget cycle, 32 states and the District of Columbia increased funding appropriations for pre-kindergarten programs. While eight states decreased funding amounts for pre-kindergarten programs, overall funding at the state level increased by almost $767 million.6 

States continue to make funding decisions based on research and thoughtful analysis of programmatic return on investment.

Ninety percent of brain development occurs before age 5.7 Early childhood is a crucial period for brain development. What a child hears, sees, feels and experiences in the early years establishes the wiring that is the foundation for life. Their experiences before beginning kindergarten strongly influence their education. 

Research has found that high-quality early learning experiences can improve children’s academic performance, build strong social and cognitive skills, reduce the cost of K-12 special education, increase long-term earning potential, and lower health and criminal justice costs. 

The High/Scope Perry Preschool study is one of the most cited examples of this research. This study identified both the short- and long-term effects of high-quality programs for young children living in poverty. From 1962 to 1967, David Weikart and his colleagues in the Ypsilanti, Mich., school district operated the High/Scope Perry Preschool Program for young children to help them avoid school failure and related problems.8,9

Researchers identified a sample of 123 children who were low-income and were assessed to be at high risk of school failure. They randomly assigned 58 of the children to a program group that received a high-quality preschool program at ages 3 and 4, and assigned 65 to another group that received no preschool program.  Project staff collected data annually on both groups from ages 3-11, and again at ages 14, 15, 19, 27 and 40. The findings of the program through age 40 span the domains of education, economic performance, crime prevention, family relationships and health.

The study found that adults at age 40 who participated in the preschool program had higher earnings, were more likely to hold a job, had committed fewer crimes and were more likely to have graduated from high school than adults who did not have preschool. 

The results showed a statistically significant effect on children’s IQs during and up to a year after the program, but not after that, suggesting the program had strong effects that faded out over time. However, all of the subsequent findings of program effects in this study (effects on school achievement, high school graduation, adult earnings and crime prevention) disprove this conclusion. 

  • The participating group significantly outperformed the non-participating group on highest level of schooling completed.
  • The study presents strong evidence that the Perry Preschool program played a significant role in reducing overall arrests and arrests for violent crimes, property and drug crimes, and reduced subsequent prison or jail sentences over study participants’ lifetimes up to age 40.
  • The economic return to society of the Perry Preschool program in 2000 was $244,812 per participant on an investment of $15,166 per participant—a return of $16.14 per dollar invested in the program.
  • Significantly more of the participating group than the non-participating group was employed at age 40, which continues the trend from age 27.

This study confirms that these findings extend not only to young adults but also to adults in midlife.

The Perry Preschool study indicates that the return to the public on its initial investment in such programs is not only substantial, but larger than previously estimated.10

In addition, more studies have now found evidence of the long-term effects of high-quality preschool programs, 11,12 suggesting that high-quality early childhood programs for young children have long-term effects that outlast short-term academic gains.


1 Heckman, J. J., A. Hojman, and J. C. Torcasso. 2014. Forecasting the Long-Term Impacts of Early Interventions. University of Chicago, Department of Economics.
2 Hernandez, D.J. 2012. Double Jeopardy: How Third-Grade Reading Skills and Poverty Influence High School Graduation. The Annie E. Casey Foundation. 
3 Early Childhood State Advisory Councils Final Report. 2015. U.S. Administration for Children and Families. Washington, D.C.
4 Heckman, J. J., A. Hojman, and J. C. Torcasso. 2014. Forecasting the Long-Term Impacts of Early Interventions. University of Chicago, Department of Economics.
5 Schweinhart, L. J., J. Montie, Z. Xiang, W. S., Barnett, C. R. Belfield, and M. Nores. 2005. Lifetime Effects: The High/Scope Perry Preschool Study through Age 40. Ypsilanti, Mich.: HighScope Educational Research Foundation. 
6 E. Parker, E. Workman, and B. Atchison. 2016. State Pre-K Funding for 2015-16 Fiscal Year: National Trends in State Preschool Funding. Education Commission of the States.
7 Child Welfare Information Gateway. 2015. Understanding the Effects of Maltreatment on Brain Development. Washington, D.C.: U.S. Department of Health and Human Services, Children’s
8 Schweinhart, L. J., and D.P. Weikart. 1997. The High/Scope Preschool Curriculum Comparison Study through Age 23. Early Childhood Research Quarterly, 12, 117–143.
9 Schweinhart, L. J., J. Montie, Z. Xiang, W. S., Barnett, C. R. Belfield, and M. Nores. 2005. Lifetime Effects: The High/Scope Perry Preschool Study through Age 40. Ypsilanti, Mich.: HighScope Educational Research Foundation.
10 Heckman, J. J., S. H. Moon, R. Pinto, P. A. Savelyev, and A. Q. Yavitz. 2010. The Rate of Return to the HighScope Perry Preschool Program. Journal of Public Economics 94 (1–2), 114–128.
11 Barnett, W. S. 1995. Long-Term Effects of Early Childhood Programs on Cognitive and School Outcomes. The Future of Children 5(3), 25–50.
12 Peisner-Feinberg, E.S., M.R. Burchinal, R.M. Clifford, M.L. Culkin, C. Howes, S.L. Kagan, and N. Yazejian. 2001. The Relation of Preschool Child-Care Quality to Children’s Cognitive and Social Developmental Trajectories through Second Grade. Child Development, 72(5), 1534-1553. 


Early Childhood Investments by CSGovts

Early Childhood Investments263.76 KB
Total State Pre-K Funding25.34 KB