How Investing In Pre-School Education Could Boost The Economy And Combat Income Inequality

A new issue brief from the Center for American Progress is calling on lawmakers to help boost the American economy by investing in universal preschool and child care programs for children under the age of five. Such investments, the brief says, benefit working families and their children while strengthening human capital and addressing increasing rates of income inequality.

The CAP proposal would match preschool expenditures up to $10,000 per child per year through federal and state government grants. It would make pre-school free for children in families that make up to 200 percent of the poverty line while providing grants to families above that threshold based on a sliding scale that would cover between 30 and 95 percent of the cost.

Such a program would build on successful pilot programs in states like Oklahoma and Georgia, as well as federal programs like Head Start that have improved access to early childhood education for low-income children. It would also close the gap in preschool attendance that has opened between high-income children and those in low- and middle-income families:

But although nationwide preschool enrollment has increased to 74 percent among 4-year-old children and 51 percent among 3-year-old children, the lowest-income and most disadvantaged children are the least likely to participate in preschool programs. And children from middle-class families are only slightly more likely to participate—or sometimes less likely when gradations of family income are compared. Preschool opportunities for 3-year-olds appear to be a particular challenge for some middle-income families. Among 3-year-olds, 34 percent of children in families earning $50,000 to $60,000 participate in preschool programs, compared to 42 percent of children in families earning less than $10,000.

At a cost of $98 billion over 10 years, universal preschool would be somewhat expensive. But its economic benefits would be substantial. At-risk children without early childhood education are more likely to drop out of school, become teen parents, or get arrested for violent crime, and they are less likely to attend college. Investing in those children early, then, would reduce societal and economic costs later in their lives, while also increasing economic mobility.

Other studies back up those ideas. A recent study showed that Chicago’s preschool program generates “$11 of economic benefits over a child’s lifetime for every dollar spent initially on the program.” A 2009 study, meanwhile, found that investments into early childhood education boosted both human capital and the nation’s GDP:

That 2009 study also found that the benefits of those investments could eventually pay for themselves.

The CAP plan also calls for bigger investments into subsidized child care and increased enrollment into Early Head Start, a program that has had substantial educational benefits for low-income children. It also highlights reforms to kindergarten-through-third grade programs that would make the benefits of early education investments more likely to take hold.