Center for American Progress

Investing in Early Childhood Education in Ohio: An Economic Appraisal
Article

Investing in Early Childhood Education in Ohio: An Economic Appraisal

Renewing Our Schools

Early childhood education enhances children’s prospects, as well as providing an economic pay-off to society. Using economic analysis and new empirical evidence, this paper describes and calculates the economic benefits to the state of Ohio that would result from expanding pre-K educational opportunities.

Currently, only 28 percent of three-year-olds in Ohio participate in publicly supported educational programs before kindergarten (through state/federal Head Start, special education, or pre-K providers). For illustrative purposes, the author proposes to raise that proportion to 57 percent and to offer education for two years before kindergarten. This policy would require 42,874 new pre-K places, necessitating a total investment of between $285 million and $482 million.

This investment is likely to yield a strong pay-off for the state government. An economic analysis that includes existing research evidence, new findings from national datasets, and state-specific data for Ohio indicates that an expanded pre-K program would yield cost-savings across several domains:

  • The school system would save $242 million. These savings would arise from lower costs for special education, less grade retention, improved working conditions for teachers, lower teacher turnover/absenteeism, and improved school safety.
  • Tax revenues would increase by $140 million. Parents and guardians would be free to enter the labor market and the pre-K children would have a higher earning capacity in the future.
  • Health and welfare systems would reap savings of $25 million in resource redistribution from existing programs.
  • Criminal justice system savings would be $375 million. Pre-K programs have a powerful impact in reducing both juvenile and adult criminal activity.

The net present value to the state of Ohio from expanding the provision of pre-K education is therefore estimated at $372 million. This estimate is based on a 5 percent discount rate and conservative assumptions about impacts. Sensitivity analysis indicates that the net present value is unlikely to fall below $108 million.

This economic analysis establishes that strongly positive returns are expected from investment in pre-K provision in Ohio.

Cost-Benefit Analysis

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. American Progress would like to acknowledge the many generous supporters who make our work possible.