There is much interest among policy-makers and practitioners in measuring the value of early-life programs for disadvantaged children. The full array of benefits and not just short-term treatment effects are relevant for this assessment. We estimated the life-cycle benefits of an influential early childhood program for disadvantaged children in the U.S. which is currently being replicated around the world. Our results make the case for comprehensive childcare from birth to age five that incorporates nutrition, parent education, health screenings, early learning and preschool. While the costs of these programs are high, the rate of return shows that they are good investments: every dollar spent on high-quality, birth-to-five programs for disadvantaged children delivers a 13% per annum return on investment.
The following column originally appeared in VoxEU.org: http://voxeu.org/article/long-term-benefits-quality-early-childcare.
The costs and benefits of early childcare for working women and their children are hotly debated (Waldfogel et al. 2010, Lipsey et al. 2013, Besharov and Call 2008, Whitehurst 2017). Do women who work and place their children in centre-based childcare harm or help them (Baker et al. 2008, 2015)? Should childcare be universal or targeted (Taylor 2017)? The strength of the evidence offered to date on the effectiveness of early childhood programmes is strongly contested (Murray 2013, Whitehurst 2017).
In a recent paper, we address these questions by evaluating the long-term effectiveness of a widely emulated prototypical, high-quality early childhood programme (Garcia et al. 2016). We evaluate the long-run benefits of the Carolina Abecedarian Project and Carolina Approach to Responsive Education (ABC/CARE) programme, which targets young children from disadvantaged families. It also provides full day childcare that frees mothers to work or go to school. It is evaluated by a randomised controlled trial with long-term follow-up. Treatment-group children receive intensive, high-quality centre-based care from age eight weeks until entry into kindergarten (Ramey and Campbell 1984, 1990). Control-group children were denied access to ABC/CARE, but a substantial fraction of them were placed in alternative childcare centres. Data covering a wide array of outcomes, such as cognitive and social-emotional skills, education, health, and administrative crime records were collected throughout the duration of the programme and up to age 34.
The programme and its replicates are currently in place at 18 sites around the world. It is a template for designing new programs, such as Educare, which offers rigorously monitored centre-based education and parental support for disadvantaged families with children between six weeks and five years old (Stein et al. 2016, Yazejian et al. 2017).
We develop and apply a rigorous approach to evaluate the effectiveness of ABC/CARE. We use multiple data sources to enrich sample size and forecast future costs and benefits beyond age 34. We monetise the multiple lifetime programme benefits, including the benefits arising from a childcare subsidy for women that fosters their engagement in the workforce and their educational attainment.
The programme promotes adult health, educational attainment, earnings, employment, and civic participation. It reduces adult crime.
The programme has a two-generation impact. There are substantial benefits for the mothers of the participants. ABC/CARE provided full-day childcare that allows mothers of participant children to work more and attend school, increasing their labour income, work experience, and education. Because the benefits from enhanced maternal income accrue early on in the life of the programme, they offset the cost of the programme earlier than other benefit sources that accrue later in life.
Figure 1 shows the monetary values of the discounted lifetime benefits and costs of ABC/CARE for the different programme outcomes. The overall rate of return is 13% per annum. Every dollar invested repays seven dollars over the life of the project. These