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Early Childhood Development: Economic Development with a High Public Return

Early Childhood Development: Economic Development with a High Public Return. Art Rolnick and Rob Grunewald Federal Reserve Bank of Minneapolis. High/Scope Study of Perry Preschool. 123 children from low-income families in Ypsilanti, Mich.

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Early Childhood Development: Economic Development with a High Public Return

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  1. Early Childhood Development:Economic Development with a High Public Return Art Rolnick and Rob Grunewald Federal Reserve Bank of Minneapolis

  2. High/Scope Study of Perry Preschool • 123 children from low-income families in Ypsilanti, Mich. • Children randomly selected to attend Perry or control group. • Daily classroom session and weekly home visit. • Tracked participants and control group through age 27.

  3. Perry Preschool IQ Over Time Prepared by W. Steven Barnett, Rutgers University

  4. Perry: Educational Effects Prepared by W. Steven Barnett, Rutgers University

  5. Perry: Economic Effects at Age 27 Prepared by W. Steven Barnett, Rutgers University

  6. Perry: Arrests per Person by Age 27 Prepared by W. Steven Barnett, Rutgers University

  7. Perry PreschoolCosts and Benefits Over 27 Years

  8. Perry Preschool -- Return on Investment • Total Benefit-Cost Ratio = $8.74 to $1 • Estimated Total Annual Rate of Return = 16% • Public Rate of Return = 12%

  9. Other Longitudinal Studies Chicago, Child-Parent Centers Half-day large-scale program in Chicago public schools Abecedarian, educational child care Full-day year-round program in Chapel Hill, N.C.

  10. Vital Ingredients of an ECD Program • Fund at Perry Preschool level to achieve high return on investment. • Target at-risk children, but make available for all children. • Allow for competition and specialization among providers. • Test for program improvement and pay for demonstrated results.

  11. Cost estimate to educate all 3- and 4-year-old children from low-income families in Minnesota at a high-quality ECD program 3- and 4-year-old children living in poverty 20,000 Cost per child $9,500 Total $190,000,000 Current funds available $85,000,000 Total annual need $105,000,000

  12. Endowment for Early Childhood Development vs. Incentives to Relocate Businesses • A $1.5 billion endowment could raise $105 million per year to meet current funding gap for ECD. • Proposals to build and renovate professional sports stadiums total over $1 billion. • Incentives used to relocate businesses in Minnesota have totaled over $500 million.

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