In Ypsilanti, Michigan, a classroom has been empty since the late 1960s. With its low ceilings, linoleum floors, and public school architecture that denotes modest aspirations, the building where the Perry Preschool Project formerly operated appears unremarkable. However, what transpired within those walls between 1962 and 1967 sparked a series of investigations that Nobel laureate James Heckman would later refer to as one of the most important discoveries in contemporary economics. Between seven and twelve dollars have been returned to society for every dollar spent on that small preschool program for underprivileged children ages three and four. Not emotionally. in tangible, auditable profits and savings.
It consistently appears in a ratio of about seven to one, sometimes higher depending on the study. High-quality early childhood programs yield a return of four to nine dollars for every dollar invested, according to the National Forum on Early Childhood Policy and Programs. Benefit-cost ratios from the Carolina Abecedarian Project, which enrolled infants as young as three months, reached sixteen to one. These projections are not the result of optimistic modeling. They come from long-term research that follows participants into their thirties and forties and measures actual outcomes like income, criminal histories, health information, and tax payments.
It’s not just their size that makes those numbers so remarkable. It’s the analogy. Consider identifying another area of public spending where the input is consistently multiplied by seven. It is fortunate for infrastructure projects to break even in a generation. Adult job training programs yield only modest results. This kind of return is uncommon for even highly regarded public health initiatives. Heckman has maintained that returns on investment gradually decrease the later you get involved in someone’s life, and he has substantial evidence to support this claim. In his words, “skills beget skills.” During the first thousand days, learning, self-control, and even cardiovascular health start to take shape.
Nevertheless, this hasn’t resulted in proportionate funding. In the US, family tuition payments account for about two-thirds of the early learning market. Although government spending on pre-primary education has increased (OECD data shows a 24 percent increase per child across member countries between 2015 and 2022), there is still a significant gap between what budgets actually provide and what research suggests. The situation is more dire in humanitarian settings. For less than $1.50 per child, the International Rescue Committee was able to implement a school readiness program in Iraq that would reach 470,000 children. As the program grows, costs are expected to fall below fifty cents. In contrast to the World Bank’s $802 estimate for traditional pre-primary education, a remote learning program for Syrian refugee children in Lebanon produced literacy and numeracy gains equal to a full year of in-person preschool at $150 per child.
Those figures have an almost annoying quality. There is no doubt about the evidence. Unlike minimum-wage studies or climate models, it is not contested. From Heckman at the University of Chicago to researchers at the Minneapolis Federal Reserve, economists of all political persuasions have come to essentially the same conclusion. putting money into early projects. It lowers the cost of crime, decreases the need for special education, decreases ER visits, and increases lifetime earnings. The public, not just specific families, benefits disproportionately. According to an analysis of the Perry, Abecedarian, and Chicago Child-Parent Centers programs, participants’ private gains were outweighed by the public returns from lower societal costs and higher tax revenue.
Nevertheless, early childhood spending is still viewed by the majority of governments as a welfare line item rather than an infrastructure investment. It’s like watching someone haggle over the price of seeds while the field is left fallow when policymakers discuss fiscal responsibility while ignoring the single highest-return category in public finance. Preschool returns don’t show up during anyone’s election cycle, so it’s possible that the political issue is just one of time horizons. It wasn’t until the 1990s that children who started attending Perry Preschool in 1962 showed the biggest increases in earnings. In terms of legislation, that thirty-year wait for a payout is an eternity, but by any reasonable economic standard, it is a good deal.
