Talk about your cost-benefit analysis: A newly published study co-authored by a University of Minnesota labor economist predicts that providing full-time, high-quality preschool to impoverished children under the age of 3 could entirely eliminate the achievement gap.

There’s more: The study, published in the Journal of Human Resources, also found that the impact of very early intervention was less likely to fade as the children aged — even if they did not stay in quality care after age 3.

“By age 3, kids from low-income families were doing as well as those from high-income families,” said Aaron Sojourner, a professor of labor economics at the University of Minnesota’s Carlson School of Management and one of the study’s authors. “So you close the gap by age 3.”

Like other economists who study human capital, Sojourner is well aware that by the time people are 18, the factors that determine how they are likely to fare in the job market — and by extension the contribution to the economy that can be expected of them — largely have been determined.

“Status at 18 can be well predicted by status at age 5, so we keep going back earlier,” said Sojourner. “And there is compelling experimental and quasi-experimental evidence that early life conditions have large, lasting impacts on life course.”

Sojourner and co-author Greg Duncan, of the University of California-Irvine, re-examined data gleaned from the Infant Health and Development Program (IHDP), a randomized clinical trial that examined the impact quality care had on outcomes for low-birth-weight babies.

The clinical trial involved babies born in the 1980s, but its design made its data worth revisiting for Sojourner and Duncan. Because it enrolled children throughout the country and regardless of income status, they could look at representative demographic samples.

Second, because a control group got no services, as in other high-quality, random clinical trials, the researchers can state with confidence that the better results seen in the children enrolled in the program were the result of the home visits and preschool.

By age 3, children from low-income families are typically one standard deviation behind their wealthier peers on IQ tests. The 1,000 children in the study who got the very early intervention had the same cognitive abilities as middle- and upper-income kids at age 3.

Some past research has suggested that strides made by children in quality care fades if they do not continue to receive intensive interventions after leaving preschool, something detractors have used to argue against investing tax dollars in the expensive programs. The new study found that very early intervention’s cognitive gains persisted.

“At 5, two years after program end and after two years of low-income families left to their own devices, about three-fourths of the gap, or 72 percent, is closed,” said Sojourner.

“That is, the low-income kids who were treated — who were randomly assigned to eligibility for this two years of free full-day care — end up at kindergarten entry looking more like kids from higher-income families than they look like kids from lower-income families.”

At age 8, five years after the program ended, some three-fifths of the IQ and math achievement gap remained closed. And while there wasn’t a high enough response rate to include data about participants at age 18, Sojourner said the information gathered was quite similar to that of the 8-year-olds.

“Whatever happens during those first three years has an outsized impact,” said Sojourner. “So if you want to raise adult productivity, spend your next dollar there, in these early years.”

Like other economists who have examined the economics of education, he’s quick to point out that spending on quality is what makes it such a good investment.

Adjusted for inflation, the program cost some $48,000 per child, the study notes. If children with developmental disabilities and transportation were excluded that would drop to $29,000, which is about the cost of quality child care in the Twin Cities metro area.

Those numbers are jaw dropping. But private equity markets, Sojourner noted, have averaged a 5.2 percent rate of return since WWII, adjusted for inflation. The economic impact of very early ed is almost double that, he said.

More than a decade ago, economist Art Rolnick, then with the Federal Reserve Bank of Minneapolis, and his colleague Rob Grunewald, proposed funding early ed for all low-income Minnesota 3- and 4-year-olds. They bolstered their argument with research showing that the return on the public’s investment was more than $16 for every dollar spent.

That research was central to building the case for ensuring low-income families’ access to high-quality care. The economic implications brought Minnesota’s business and civic leaders to the table, where they underwrote a program to identify quality.

Full funding of an associated state scholarship fund, which now contains enough money to satisfy 9 percent of the need, will come before the Legislature next month.

Rolnick was quick to praise Sojourner’s work as groundbreaking. There are numerous studies showing the value of early ed, he explained, but the new vein of data Sojourner has tapped has only solidified earlier findings.

“The research Aaron is bringing to the table here is so important because we’re finding additional research independent of the classic [studies] that we cite that are finding similar results and, in fact, in some cases even better results,” said Rolnick, now co-director of the Human Capital Research Collaborative at the University of Minnesota.

“There is an overwhelming amount of evidence that is now building through Aaron’s work in particular to show that indeed we can expect a very, very high return to the public by investing in high quality early education for our children.”

Finally, Sojourner noted, the findings are something of an oddity in economic research: “Early childhood investments are a rare policy area where there is not tension between efficiency and equity.”

“Usually, to make things more equal, we may have to make them less efficient. This is the conventional objection to policies like the minimum wage, progressive income taxes and the like,” Sojourner concluded. “But with early childhood investments, putting resources towards the development of disadvantaged children promotes both efficiency and equality.”

Attached File(s):

Duncan Sojourner 2013 JHR Gap Closing.pdf