Study Finds Early Childhood Programs Yield Exceptional Returns

High-quality early childhood development (ECD) programs targeted to low-income children produce at least $3 in benefits for every dollar of investment and yield high benefit-cost ratios according to a new report from the Economic Policy Institute. ECDs, targeted to 3 and 4 year old children, contribute directly to higher employment and earnings, better health, less crime and poverty, greater government revenues, and higher levels of verbal, math and intellectual achievement for participating students. The report also points to the benefits of improving work skills and reducing poverty and crime that would ultimately strengthen the U.S. economy and its competitiveness in the global market.

Contact: Anna Lovejoy
Education Division

http://www.nga.org/center/frontAndCenter/1,1188,C_FRONT_CENTER%5ED_7516,00.html

Specifically, the study finds that:

* Providing poor 3 and 4-year-old children with a high quality program would initially cost $19 billion a year if started in 2005, but by 2050, the benefits provide a net savings to government and taxpayers of $61 billion (in 2004 dollars).

* Savings in crime reduction due to investments in ECD programs would total $155 billion (in 2004 dollars) by 2050.

* The increase in earnings due to ECD investments would total $107 billion (in 2004 dollars) or 0.43 percent of the gross domestic product (GDP) by 2050.

* Benefit-cost ratios for providing these programs can be as high as 8.74 to 1.

* Long term savings from ECD programs could offset about one-fifth of the projected deficits of the Social Security trust fund.

Related Links:

* Economic Policy Institute Report, ”Exceptional Returns: Economic, Fiscal, and Social Benefits of Investment in Early Childhood Development” http://www.epinet.org/content.cfm/books_exceptional_returns