Investing in kids: early childhood programs and local economic development

Abstract

quickly shared within the early childhood community.The article was also quickly used to advocate for more funding for high-quality pre-K education.As Rolnick (2008) said, because of this article, "our phones have been ringing off the hook."In this article, Rolnick and Grunewald (2003) argue for pre-K because "we estimate the real internal rate of return for the Perry School program at 16 percent . . .about 80 percent of the benefits went to the general public (students were less disruptive in class and went on to commit fewer crimes), yielding over a 12 percent internal rate of return for society in general . . .The returns to [early childhood development programs] are especially high when placed next to other spending by governments made in the name of economic development.Yet [early childhood development] is rarely considered as an economic development measure."(For those unfamiliar with the research on pre-K, the Perry Preschool program of the 1960s is the pre-K program with the best research evidence for long-term benefits after age 25.Participants in Perry Preschool have been compared with a randomly chosen control group up through age 40. 4 This comparison includes employment, earnings, education, welfare receipt, and involvement with crime.)My concern about the Rolnick/Grunewald argument is that the authors treat "economic development benefits" as being the same as "economic benefits."But "economic development benefits" form a category of economic benefits that has a special importance.In arguing for the superiority of early childhood development over business incentives, Rolnick and Grunewald include all benefits.For the Perry Preschool program, they include the benefits from crime reduction, which are at least half of the benefits of this program. 5However, reduced crime is not the same as better employment opportunities.Economic development practitioners are trying to improve employment opportunities for local residents.Are early childhood programs a good "economic development investment" if we only consider effects on employment opportunities for local residents?An emphasis on "economic development benefits" only makes sense if such benefits are especially important.As this book will argue, improved employment opportunities for local residents do have special importance.There is something different about local jobs for local residents as an economic good.There is also a special political importance attached to these kinds of economic development benefits.Introduction 11 Notes 1.In referring to "local economic development," I sometimes use that term as shorthand for "state and local economic development."States are one type of location that can experience local economic development.2. In this book, I refer to part-time or full-time programs for three-and four-yearolds that have a predominantly educational focus as "pre-K programs" or "pre-K education," where "pre-K" is short for "prekindergarten."Some of the quotations I use refer to such programs as "pre-K" programs, whereas other quotations refer to such programs as "preschool."I avoid "preschool" because it seems a strange way to refer to a program that is predominantly educational in focus, and that in many cases is run by the public school system.3.In writing this book, I have double-checked the numbers and simulations, and updated some numbers.Therefore, some of these new and improved detailed numbers differ modestly from results presented in my previous reports (Bartik 2006(Bartik , 2008)).However, these differences are modest enough that none of the previous qualitative findings of these reports must be altered.Even so, the numbers in this book should be regarded as more up-to-date and definitive estimates.4. The Perry study has followed the lives of 123 high-risk children from African American families who lived near the Perry Elementary School in Ypsilanti, Michigan, in the 1960s.5.In the benefit-cost analysis of the Perry Preschool program by Schweinhart et al. (2005, Table 7.8, errata-corrected version), 48 percent of the public benefits from the program are due to crime reduction.The percentage of the benefits from crime reduction would be even greater if nonmonetary costs to victims of crime were included.6.From interviews with Art Rolnick, it is clear that his involvement in early childhood programs originally grew out of his opposition to business incentives.Opposing business incentives leads to the logical question of whether there is any alternative.When asked "How does a person in your position . . .come to focus on children?" Rolnick (2008) replied as follows: "It was an accident . . .Much of my work over the last dozen years has raised questions about . . .local economic development initiatives . . .We argued that these types of economic development programs do not create jobs, they just move them around . . .The work we were doing on the economic bidding war led us to ask the question, 'What would be the best way to promote local economic development?'"7.In addition to the book text, there are appendices that provide additional theoretical and empirical detail on this book's arguments and estimates.These appendices are available on-line from the Upjohn Institute at http://www.upjohn.org/

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