How Expanding Preschool Could Mean An Extra $113 In Everyone’s Pocket

President Obama has proposed expanding publicly financed high-quality preschool to all families, starting with low-income children. A new study has found that giving the children of poor parents access to early childhood education will have huge benefits for kids as well as society as a whole.

Many low-income parents, the paper finds, are unable to invest in preschool for their children. This often means that their kids aren’t prepared for school later on in life, including college. The most effective intervention, then, may be increasing access to preschool. And the benefits that the paper finds of doing so are very clear.

The paper finds that preschool significantly boosts IQ and education levels in the long run, as well as socialization skills, which have been shown to have positive effects on future education and earnings.

But the positive effects of providing publicly financed preschool to low-income children spread throughout society. The paper finds that everyone’s average earnings in the long run are increased by $113 each year if access to preschool is increased. That in turn will lead to an increase in tax revenue. It also improves the ability for younger generations to earn more than their parents, increases their likelihood to go to college over their parents’ generation, increases the college completion rate for the children of non-college educated parents by 3.6 percent, and reduces income inequality. It lifts people out of poverty, reducing the number of people who make less than 70 percent of average earnings by about 6.5 percent.

Yet these benefits may be underestimated. The data the researchers use don’t take the impact of Head Start into account. It also looks at the effects of preschool programs from the 1960s, but preschool has greatly improved since then, so it is likely to have an even bigger impact.

President Obama has proposed spending $75 billion to expand these programs. His push comes at a time when spending has moved in the opposite direction. While some are considering universal preschool programs, overall states are spending the lowest amount per child in Pre-K in a decade.

The U.S. is far behind its developed peers when it comes to investment in early childhood education. It ranks at number 21 for the share of GDP spent on preschool.