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Early Education Benefits Individuals, Society

Many advocates of providing universal preschool contend "it's the right thing to do," and few will argue it isn't. But preschool promises long-term and long-lasting economic benefits to society, as well, as these two studies below show.

An Annual Return That Beats the Stock Market

An unlikely champion of early childhood education, Art Rolnick, senior vice president and director of research of the Federal Reserve Bank of Minneapolis, says a good preschool can offer a 12 percent annual return, after inflation.

Rolnick has received national attention for a paper he published in 2003 on the topic with Minneapolis Fed analyst Rob Grunewald. That's better than the stock market, he notes, and any other social program.    

In "Early Childhood Development: Economic Development with a High Public Return ," Rolnick and Grunewald write:    

"Early childhood development programs are rarely portrayed as economic development initiatives, and we think that is a mistake. Such programs, if they appear at all, are at the bottom of the economic development lists for state and local governments. They should be at the top. Most of the numerous projects and initiatives that state and local governments fund in the name of creating new private businesses and new jobs result in few public benefits. In contrast, studies find that well-focused investments in early childhood development yield high public as well as private returns."

North Carolina Project That Shows Long-Term Benefits

One of the better known of those studies is the Abecedarian Early Childhood Intervention Project. It began in the 1970s at the FPG Child Development Institute at the University of North Carolina at Chapel Hill.    

A recent benefit-cost analysis of the long-running research program concluded that taxpayers can expect four dollars in benefits for every dollar spent on high-quality early education programs.    

The researchers' benefit-cost analysis found:

  • Children in high-quality programs are projected to make roughly $143,000 more over their lifetimes than those who didn't take part in the program.
  • Mothers of children who were enrolled can also expect greater earnings - about $133,000 more over their lifetimes.    
  • School districts can expect to save more than $11,000 per child because participants are less likely to require special or remedial education.

Other Major Findings

  • Children who participated in the early intervention program had higher cognitive test scores from the toddler years to age 21.
  • Academic achievement in both reading and math was higher from the primary grades through young adulthood.
  • Intervention children completed more years of education and were more likely to attend a four-year college.
  • Intervention children were older, on average, when their first child was born.
  • The cognitive and academic benefits from this program are stronger than for most other early childhood programs.
  • Enhanced language development appears to have been instrumental in raising cognitive test scores.
  • Mothers whose children participated in the program achieved higher educational and employment status than mothers whose children were not in the program. These results were especially pronounced for teen mothers.

The Abecedarian Project was a carefully controlled scientific study of the potential benefits of early childhood education for poor children. Children from low-income families received full-time, high-quality educational intervention in a childcare setting from infancy through age 5 and their progress was monitored over time with follow-up studies conducted at ages 12, 15, and 21.


Early Childhood Development: Economic Development with a High Public Return (March 2003) - By Arthur J. Rolnick and Rob Grunewald.

Abecedarian Early Childhood Intervention Project - A carefully controlled scientific study of the potential benefits of early childhood education for poor children, conducted in the 1970s in North Carolina.

Watch Video about FPG Abecedarian Project - This 7-minute video clip looks at the Abecedarian Project 30 years after its start. The documentary aired on the National Geographic Channel in the United States in 2007.