Comparative benefit–cost analysis of the Abecedarian program and its policy implications

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Abstract

Child care and education are to some extent joint products of preschool programs, but public policy and research frequently approach these two goals independently. We present a benefit–cost analysis of a preschool program that provided intensive education during full-day child care. Data were obtained from a randomized trial with longitudinal follow-up through age 21. Study participants were 104 economically disadvantaged children and their families. Economic benefits include increased maternal earnings, decreased K-12 schooling costs, increased lifetime earnings and decreased costs related to smoking. Net present value is positive over a range of reasonable discount rates. Program benefits are compared to estimates from other studies with particular attention to a benefit–cost analysis of a half-day preschool program that did not provide child care. Returns to early childhood policy could be improved by greater attention to how programs might maximize education and child care benefits together regardless of the primary aim of the policy's agency sponsor.

Introduction

It is increasingly accepted that preschool education can be a sound public investment, especially for children disadvantaged by poverty or other adverse circumstances (Heckman & Krueger, 2004). Barnett (2004) has proposed that returns to preschool programs depend on: (1) precisely what the program provides; (2) who attends the program; and (3) the broader educational, social and economic context of the program. These three factors likely explain much of the difference in outcomes between the now widespread public preschool programs and the intensively studied models on which public programs are at least theoretically based (Barnett, 1998). A better understanding of these factors would make it possible to design more economically efficient preschool policies and programs.

In this paper we seek such insights from a benefit–cost analysis of the Abecedarian program and comparisons to that performed for the High/Scope Perry Preschool program. Our research on the Abecedarian program offers a unique opportunity to examine the economic benefits of full day, year-round child care. Such programs have been subject to far fewer rigorous studies than part-day preschool programs. The Abecedarian program is the only randomized trial of child care with a longitudinal follow-up to adulthood. Yet, much can be learned about how to maximize the public returns to investments in preschool from the study of such programs.

Here, comparisons of costs and benefits will be limited to the Abecedarian and Perry Preschool programs. These two studies represent the entire stock of comprehensive benefit–cost analyses of preschool programs in which the underlying data come from randomized trials. This situation is less limiting than it might appear as these two programs are archetypes of major policy alternatives and to some extent represent a critical divide in U.S. public policy. The Perry Preschool program offered educational experiences of 2.5 h per day for children at ages 3 and 4 during the academic year (approximately 180 days) accompanied by home visits in which teachers provided tutoring and worked with parents. The Abecedarian program offered educational experiences of up to 10 h/day for children from early in the first year of life until they entered kindergarten (approximately 250 days per year).

Section snippets

Current policy context

Most U.S. children under 6 yr of age receive some form of non-parental child care or education (Capizzano, Adams, & Sonenstein, 2000). This is a remarkable change over the past 40 yr and reflects increased demand for these services. Between 1960 and 1995, the labor force participation rate of mothers of preschool children increased from 20% to 62% (Committee on Ways and Means, 1998). This trend has encompassed all preschool children.1

Previous research

Studies have found positive and persistent effects of preschool on cognitive and social development (Barnett, 2002). However, relatively few studies have investigated how effects vary with the characteristics of the population served, the program or the societal context. Higher quality studies with independent information on the programs and validated measures of program participation rather than parent report are even less common. Selection bias is a threat for many studies, and heavy

Abecedarian project

This paper's information on the costs and benefits of investing in the joint production of child care and early education of children from low-income families comes from a unique experiment, the Abecedarian study (see Campbell, Helms, Sparling, & Ramey, 1998). The study randomly assigned to a treatment or control condition 112 children, mostly African American, born between 1972 and 1977 and who were believed to be at risk of retarded intellectual and social development. Family background

Benefit–cost analysis

Benefit–cost analysis of the Abecedarian program followed standard procedures (Levin & McEwan, 2001) and is methodologically comparable with benefit–cost analyses of the Perry Preschool program (Barnett, 1996; Nores, Barnett, Belfield, & Schweinhart, 2005). Although minor differences in assumptions and in the specific outcomes measured between the two studies produce some differences in the analyses, these do not materially affect the comparisons of interest in this paper. A preliminary version

Comparative analysis, interpretation and generalization

The current study is one small, randomized trial in a particular time and place. How far is it likely to generalize? What can we learn about designing more efficient public policies from this study in the context of the larger literature briefly reviewed earlier? To evaluate potential generalizations one must have information on the extent to which the results are sensitive to variations in: treatment (process), who is served (person) and broader social and economic conditions (context). Thus,

Discussion

The Abecedarian preschool program was educationally intensive and temporally extensive. It likely represents an upper bound on public investments in preschool education that might be realistically considered. Despite its high cost, the program passes a basic benefit–cost test at discount rates of 3–7%. Given the estimated net present value at 7%, and the benefits we were not able to include in the analysis, the internal rate of return to the program could be considerably higher. This study adds

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