Obama Says Preschool Pays Off, But at What Cost?
Business + Economy

Obama Says Preschool Pays Off, But at What Cost?


President Obama dedicated a significant portion of his State of the Union speech last night to the unlikely subject of preschool, calling for “states to make high-quality preschool available to every child in America.”

Universal preschool certainly sounds great, but at a time when education budgets are being cut, what’s the actual economic cost and benefit of attending preschool? Are finger painting and Play-Doh skills really worth it?

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In the U.S., 28 percent of 4-year-olds were enrolled in a state-funded preschool program during the 2010-11 school year, according to the National Institute for Early Education. Eleven states (most recently Arizona) provide no state-backed programs. The average amount states spent per child was $4,151 in 2011, though state support has been declining overall. Total funding declined $60 million from the previous year, following a $30 million decrease in 2009-10, and fell in 26 of the 39 states with pre-K programs.

For Obama’s plan to work, Lisa Guernsey, director of the early education initiative at the New American Foundation, a Washington-based policy group, estimates it would cost states and the federal government roughly $8,000 per child, or an additional $10 to $15 billion each year, to expand pre-school nationwide and for states to raise quality standards.

As for the payoff, Obama claimed in his speech that “every dollar we invest in high-quality early education can save more than seven dollars later on.” But some studies show the payoff can be even higher than that. A 2011 study by University of Minnesota professor of child development Arthur Reynolds, which looked at the long-running and federally funded Child-Parent Center preschool program in Chicago, found that every dollar spent on the program generates $11 of economic benefits over a child’s lifetime in increased earnings and tax revenue, reduced criminal behavior, and lower welfare costs. When researchers included the benefits from reductions in smoking, total returns jumped to more than $12 per dollar invested.

Another 2011 study by Reynolds followed 1,539 low-income children into adulthood – 950 of which participated in the Child-Parent program, and the rest did not attend preschool but participated in full-day kindergarten. Those who attended preschool were 28 percent less likely to be in jail or develop alcohol or drug problems, were 24 percent more likely to attend a four-year college, and 20 percent saw higher incomes. Studies have also shown that preschool teaches children important “soft skills” like learning to focus, being curious and controlling tempers.

Not all preschool programs are created equal, however. Many credit the success of Chicago’s preschool program to the small class sizes, teacher aides, and high parent involvement – parents are required to spend time in their child’s classroom, and staff members often make home visits.

Unfortunately, funding for the program has dwindled over the years. The program had more than 25 centers serving some 1,500 children in the mid-1980s (around when the children in Reynolds study were attending preschool), but today, only 16 centers remain (five of which recently opened after receiving a grant) – many with reduced hours, staff and services. Some of the parent-child services that were originally in the program, for example, have been eliminated. Officials blamed the downsizing on the high cost of the program. The majority of the cuts were made in 2004, and at the time, the program cost approximately $17,000 per child – significantly more than the average preschool. 

Obama said in the State of the Union, “Studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, and form more stable families of their own. So let’s do what works, and make sure none of our children start the race of life already behind.” To do so, however, could require significant up-front investment.