The Cost of Inaction on Universal Preschool

Children work with scissors and colored pencils at a desk, October 2014.

About 3 million children in the United States begin kindergarten each fall, marking their entry into the American education system. However, a significant portion already have some school or early learning experience through preschool. There has been a tremendous increase in the number of children enrolled in preschool in the United States, from fewer than half a million in 1964 to nearly 4.7 million in 2014. Studies show that high-quality preschool works, and that children who attend preschool are more academically and socially prepared for kindergarten than their peers who did not attend. Evidence from long-term evaluations suggests that preschool has significant effects on important societal outcomes such as high school graduation, even as academic outcomes converge with children who did not attend preschool.

Despite research showing the benefits of preschool, American children have uneven access to quality affordable programs. In the 2015-16 school year, 43 states and the District of Columbia had some form of state-funded public preschool whereas seven states had none. As a result, just 32 percent of 4-year-olds across the United States attended state preschool programs. Moreover, although states have improved program quality in the past 15 years, nine programs still met fewer than half of the National Institute for Early Education Research’s (NIEER) quality standards, a checklist of 10 research-based benchmarks designed to capture the resources needed to support high quality.*

Although studies suggest that all children can benefit from high-quality preschool and that quality preschool yields significant economic benefits, not all children have access to such opportunities. As a result, the United States loses money that would otherwise be saved or earned throughout a child’s lifetime. But what if the United States had universal high-quality public preschool that was publicly available to all children for the year before kindergarten? What would be the economic benefits over the lifespan of a single class of preschool children?

The economic benefits of preschool are more than $83 billion per year

A new analysis by the Center for American Progress shows how much the United States would benefit from universal high-quality preschool for 4-year-olds. Based on research that quantifies long-term economic outcomes in states that have high-quality preschool, this analysis concludes the United States would expect to see a net benefit of more than $83.3 billion for each one-year cohort of 4-year-olds. In other words, every year that policymakers delay a universal preschool investment, the United States loses billions of dollars that come from preschool’s economic benefits—such as less frequent grade retention and a reduced need for special education. This saves a significant amount of taxpayer dollars.

Preschool also leads to increased earnings down the road. When children enter school ready to learn, later experiences in elementary and secondary school can help them sustain and amplify their early gains. Maintaining this positive trajectory makes it more likely that children will graduate from high school. In fact, increased wages associated with high school graduation represent the biggest source of monetary benefits from preschool.

This analysis is based on economic benefits of preschool from rigorously designed preschool impact studies, as well as population estimates and current K-12 student spending. Although research suggests additional benefits from a second year of preschool, the economic benefits data were derived from studies of preschool programs for 4-year-olds. For this reason, the authors restricted the present analysis to 4-year-old children. The authors make several assumptions as part of this analysis, which are discussed in full in a methodological appendix. The analysis assumes that a universally available public preschool program would enroll about 75 percent of all 4-year-old children and that states would be required to increase spending in order to meet high-quality standards, including adequate teacher compensation, low student-teacher ratios, and specialized teacher training in early childhood. Importantly, this analysis shows preschool yields a substantial economic benefit, despite greater spending. Total economic benefits include benefits that accrue to taxpayers and participating individuals, including children and their parents.

This analysis complements earlier research on the benefits and costs of a universal pre-K program in the United States by using benefits data derived from state and district public preschool programs. This analysis assumes that these estimates provide an indication of what states can implement at scale.

Quality preschool has positive effects on parents

These estimates consider the benefits that accrue to society from parents as well as children. When children attend preschool, parents have more time to return to school or participate in the labor market. In general, research shows that increased attendance in early care and education increases mothers’ labor force participation and work hours. This has implications for parents’ earnings and reliance on public programs. Indeed, in this analysis, about 7 percent of the economic benefits from preschool are due to parents’ increased labor market earnings and decreased use of public assistance.

Making progress in the United States

While the majority of U.S. children do not have access to high quality preschool, some states have already taken steps toward capturing these benefits. However, nearly all states would need to significantly ramp up enrollment and improve quality to maximize benefits from preschool. Only seven of the 50 states plus the District of Columbia served more than half of 4-year-old children during the 2015-16 school year. Nine programs meet fewer than five of the 10 benchmarks established by NIEER, and not all operate for a full day and school year.

States with less developed preschool programs stand to gain the most, especially those with large populations. For example, California serves about 35 percent of 4-year-old children in programs that on average meet fewer than half of the NIEER quality benchmarks. By increasing enrollment to serve 75 percent of children and improving program quality, the authors estimate that California could see an additional $9.7 billion in total benefits over its estimated current benefits of $2.7 billion.

After taking into account the benefits that some states already accrue through existing preschool investments, we estimate that the net cost of inaction on universal high-quality state preschool is $56.2 billion. In other words, the United States could gain an additional $56.2 billion on top of current economic benefits expanding access to high-quality preschool.

Conclusion

Children who attend high-quality preschool are better prepared for school and better equipped to contribute to the economy in the long run. Experts agree that preschool is cost-effective, and that promising research on long-term impacts justifies the continued implementation and evaluation of scaled-up preschool programs. Although critics often cite that scaling up preschool is too expensive, this analysis shows that maintaining the status quo means losing significant economic benefits over time. States are already leading the charge on scaling up programs and continuing to improve quality. It is time to ensure that all children have access to high-quality preschool—no matter where they live—with a federal investment to support state preschool expansion.

Cristina Novoa is a policy analyst for Early Childhood Policy at the Center for American Progress. Katie Hamm is the vice president for Early Childhood Policy at the Center.

For more information about the methodology used in this analysis, read the authors’ Methodology Memo here

*Authors’ note: Since 2003, NIEER has compared each program’s policy against a checklist of 10 research-based quality standards. This list has remained unchanged until recently. Based on newer research demonstrating the importance of continuous quality improvement in teaching, NIEER revised its quality standards benchmarks in the 2016 State Preschool Yearbook. These updated benchmarks reflect a greater focus on teacher professional development and the implementation of a continuous quality improvement system (CQIS).