The Trillion-Dollar Edge (Spring 2006 Trust Magazine article)

Preschool benefits children and now we know its economic power.

October 1962 is remembered for several events, noteworthy even at that time. Among them was the opening of the Second Vatican Council, word from Stockholm that Francis Crick and James Watson were to share a Nobel Prize for solving the riddle of the molecular structure of DNA, and the 14 days of the Cuban missile crisis, when the Cold War threatened to get hot.

Only years later, however, have we been able to look back and realize that history was also being made in a nondescript recreation center serving the mostly poor, African-American residents on Harriet Street in Ypsilanti, Mich. Preschool classes began for a group of three-year-olds from the projects surrounding the center and the all-black Perry School down the street.

They were part of an unorthodox experiment engineered by the Ypsilanti Public Schools psychologist and director of special services, David P. Weikart. He wanted to see if intense, early education could keep these African-American children, when they reached elementary school, from being placed in special education classes.

The preschool children were randomly selected, but not their teachers, who were triple-certified in preschool, elementary and special education, and were paid a 10-percent bonus over the regular Ypsilanti salary scale.

Each teacher not only spent 2 1/2 hours each weekday morning with five or six of the preschoolers, but also made a weekly, 90-minute home visit to work one-on-one with each child and parent.

The structure of the classes was highly participatory: The children had a say in the activities they pursued each day.

Evelyn K. Moore, founder and president of the National Black Child Development Institute, was one of the four original Perry preschool teachers. She had experience teaching special education classes in Rose Hill, Mich., that were disproportionately male and African-American. She remembers children in special ed classes who knew all the baseball players and could sing the lyrics to every popular record, “but they weren't reading,” she recalls.

“I knew that these kids were not retarded, not in the true sense of the word. But they did have some missing elements in terms of their development, and that's what Dave [Weikart] was about filling in.

“His hypothesis was that if we took these children earlier and really bombarded and enriched their learning, they would not end up in rooms for educable mentally retarded. And most didn't.”

Back then, IQ was widely thought immutable, and the idea of exposing three- and four-year-olds to letters and numbers was almost heretical. But the Perry preschoolers' IQs jumped an average of 15 points by the time they entered kindergarten, moving most “out of the mildly retarded IQ range and into the normal range,” Weikart wrote in a subsequent memoir. Even though that jump dissipated within a year or two, teachers reported that the Perry preschoolers behaved better in their classes and scored higher on achievement tests.

The Perry preschool experiment made history not simply because early education helped these young children off to a better start, but because for many it lit a spark that has never been extinguished. Although the participants' names have been kept confidential all these years, National Public Radio featured the program on the 40th anniversary of its first graduation and included the comments of a Perry preschooler whose real name was withheld: “David” is a health-care consultant with a college degree who recalled that “even during the playtime, there seemed to be a learning component to it.”

Looking back, he said, “I understand it now as relationship-building, playing games with others, getting used to interacting with others. . . . Maybe that's why I'm such an inquisitive person today.”

Follow-up was part of the experiment from the start. Weikart and his team surveyed the same 123 youngsters every year until they turned 11, and then at ages 14, 15 and 19, again at 27 and most recently at age 40. All but a handful of the preschoolers and controls have been found and interviewed for each follow-up. Ninetyseven percent of those still living were interviewed for Perry at 40.

The project was clearly a winner. At every juncture, by almost every measure, the Perry preschoolers fared better than those who missed out on the early education. They earned better grades, made less use of welfare and committed fewer crimes.

Two-thirds of the Perry preschoolers graduated from a regular high school, compared to 45 percent of the others. Fewer repeated a class or were referred to special education. Thirty-six percent of the Perry preschoolers had been arrested five or more times by age 40, versus 55 percent of a control group.

The reduced crime largely explains why economists have calculated that, even though more than $15,000 in current dollars was spent over two years on the education of each Perry preschooler, society has recouped 17 times that, or more than $250,000. The earnings of the Perry students were higher, more were employed, and more owned their own home and a car. They were even more likely to have a savings account.

Today the celebrated Perry Preschool Project has been buttressed by other research.

The Chicago Parent-Child Center Study, one notable example, began providing an enriched early education to low-income Chicago children in 1966. Comprehensive educational and family-support services were given to 989 children starting at age 3 and continued until the children reached 9. The children were compared to a sample of 550 eligible children who enrolled in all-day kindergarten but did not receive the preschool services and follow-up.

Another initiative, the Abecedarian study, has followed 111 children in rural North Carolina born in 1972 and given services starting from infancy.

Both of these studies have also shown solid returns. Fewer children required special education, more graduated from high school, fewer committed crimes, and as a group they have enjoyed higher earnings. The impact of these and other early childhood studies has been magnified by the emergence of research demonstrating how rapidly the brain develops in very young children and how important a stimulating environment is to that development.

States have caught on. Georgia and Oklahoma have led the way in offering voluntary prekindergarten education to all four-year-olds, and Florida recently launched its own initiative, three years after voters added to the state constitution the promise of “a highquality prekindergarten learning opportunity” for every four-year-old.

The push for improved early childhood education has picked up support across party lines, with such gubernatorial champions as Rod R. Blagojevich (Illinois-R), Jeb Bush (Florida-R), Tim Kaine (Virginia-D) and Tom Vilsack (Iowa-D). In 2004, 15 states increased spending on preschool, by over $200 million; in 2005, 26 states did so, by over $600 million, giving this opportunity to 120,000 more children. And of those 26 states, half were led by Republican governors, half by Democratic ones.

This movement has been advanced by The Pew Charitable Trusts, other foundations, such as the Foundation for Child Development and the David and Lucile Packard Foundation, and private-sector firms, such as PNC Financial Services Group, that have funded a host of early education research and public-education efforts. The Trusts has invested more than $40 million to show the benefits of early education; and the Trustssupported National Institute for Early Education Research at Rutgers University, Fight Crime: Invest in Kids, and the Washington-based advocacy organization Pre-K Now are particularly savvy and influential.

The Committee for Economic Development, representing business and education leaders, called for universal preschool education in 2002, and the Council of Chief State School Officers supports the effort as well.

As vital as they are, the benefits of preschool extend beyond the positive impact on children. Research has also found relationships between investments in preschool and sustained economic development.

Exploring the conclusions and helping mobilize business leaders and policy makers around this issue was the theme of the conference “Building the Economic Case for Investments in Preschool,” sponsored by the Committee for Economic Development, PNC Financial Services Group and the Trusts in New York in January. Researchers, business executives, bankers and people directly involved in pre-K discussed the broader advantages of preschool.

Speakers acknowledged the benefits to children and the importance of leveling the playing field so that all children get a good start—the “moral argument,” as one speaker put it— but the focus was the positioning of American business, and indeed the nation itself, in an increasingly aggressive global economy.

Business's concerns were presented quantitatively in several ways:

• The growth of labor-force quality in the United States has slowed, measured by a projected drop in college graduates and the increase in college dropouts in the years 2000-2020, compared to the years 1980-2000.

  University of Chicago economist and 2000 Nobel Prize laureate James J. Heckman, Ph.D., mentioned this point, calling it an “ugly fact” of American society.

• In the 2005 skill-gaps survey by the National Association of Manufacturers and Deloitte Consulting LLP, 80 percent of companies (of more than 800 surveyed) reported that skill shortages have already affected them. Some 36 percent of employees have insufficient reading, writing and math skills, encroaching on production levels, productivity and customer demand.

  Albert P.L. Stroucken, chairman, president and CEO of the H.B. Fuller Company and chairman of the Minnesota School Readiness Business Advisory Council, cited these findings. “That human-capital gap” between the availability of skilled, adaptable workers and the employee-performance requirements of modern manufacturing, he said, “is threatening the United States' ability to compete long-term.”

These polls were underscored by a survey, conducted by Zogby International and released at the conference, that polled 205 senior executives at Fortune 1,000 companies and other firms with more than 1,000 employees. These participants acknowledged prekindergarten as essential to a better educated workforce: 83 percent favored public investment, and 63 percent approved of active business-sector support for universal pre-K programs.

Said Charles E. M. Kolb, president of the Committee for Economic Development: “When one-third of American companies are going overseas to find educated workers, and 38 percent of business leaders say we already face a competitive disadvantage, it is clear that there are serious problems in the American workforce.”

The Zogby assessment, he continued, “makes it clear that immediate investments in effective preschool programs are vital for our future competitiveness in the global economy.”

The conference speakers had various ways of addressing this point. As Arthur J. Rolnick, senior vice president and director of research at the Federal Reserve Bank of Minneapolis put it: “Early child development is economic development, and it's economic development with a very high public—and I want to emphasize public—return.”

Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland, said: “We need to strengthen the entire supply chain. Those of you who are in business know that a quality product starts with a quality process. And it costs much more to fix defects at later stages in the process than it does if you do it right at the outset. So prudent investments at early stages have the potential for paying a stream of dividends for all of us well into the future. In the case of early childhood education, these investments do hold the promise of narrowing some of the skill gaps that we see in society, creating higher employment levels and helping us achieve better economic policies.”

The advantages of quality preschool, of course, become even more noticeable as the children get older and move through school and into adulthood, said W. Steven Barnett, Ph.D., director of the National Institute for Early Education Research.When researchers track the children over time, acquiring actual data rather than depending on assumptions, he pointed out, their analyses become more accurate. In the case of preschool, the advantages found as the children enter their 40s are greater than researchers had projected. In addition to the $17 to $1 return on investment of the Perry project, he said, the Chicago initiative has shown a $7 to $1 margin, and the Abecedarian project, nearly $4 to $1.

He cited a study done by Georgetown University investigators, which documented a positive impact of one year of preschool on 3,000 Oklahoma children, including not only poor children but also those in families with higher incomes. Barnett's institute replicated the study in five states—Michigan, New Jersey, South Carolina and West Virginia as well as Oklahoma. The results of standardized tests, Barnett reported, found similar gains, and these held across economic classes, although poorer children increased more.

These findings, he observed, strengthen the argument for universal preschool over targeted programs. The latter, he said, are “problematic, because the poor kids you target in the fall are not the poor kids in the spring. The benefits [of preschool],” he also noted, “don't stop at the poverty line.”

Moreover, the universal approach is more likely to help address school failure, which “is not just a problem cannot solve the school-failure problem if we only deal with poor children.”

The fact that all children gain through preschool was previously viewed as a “possibility, and now it's a demonstrated actuality,” he said, adding, “It's safely established. Investing in preschool can yield high returns and is a progrowth economic strategy.”

In the question-and-answer session, David Lawrence Jr., president of the Early Childhood Initiative Foundation and former publisher of The Miami Herald, suggested that universal preschool was necessary in order to provide every child with fundamentals— and to gain political consensus. Preschool, he said, “will never be a true movement unless it is about everyone's child.”

For the very long term—60 years—Isabel V. Sawhill, Ph.D., vice president and director of the Economic Studies Program at the Brookings Institution, projected the effect of pre-K investments on economic growth, the first such quantitative effort, she said. Sawhill and her team constructed a mathematical model that assumed participation of 70 percent of all three- and four-year-olds, a pattern that has emerged in places where preschool is both universal and voluntary.

Her program shows that the nation's gross domestic product would be $988 billion larger within six decades, and the growth effects could become selfsustaining because, as labor productivity and output improve, savings and investments swell.

Sawhill cautioned, however, that the initial impact of universal pre-K might be a period of slower economic growth: As young people stayed in school longer, the labor supply would be smaller.

But then the effects of their better education would lead to a more productive labor force that can use sophisticated equipment, learn new tasks and skills more easily, be more creative and require less supervision. Not only does the employer benefit, but so does the whole economy “because the quality of the labor force dictates what kinds of machines, technology, forms of organization can be used.”

The Federal Reserve Bank's Arthur Rolnick described his own estimate by converting the data into the “internal interest rate”—essentially, the growth of the investment. High-quality preschool, he said, returned 16 percent annually, adjusted for inflation; 4 percent goes to the children, who are more successful in life; and 12 percent is public. If venture capitalists saw a “16 percent return, inflation adjusted,” he said, “that project would not go unfunded for very long.”

Heckman introduced the idea of “efficiency,” a way that economists evaluate productivity. Economic policy, he said, often requires selecting between equity and efficiency, but with early education, there is no tradeoff. The central lesson of the “flagship” Perry experiment, he said, was the enriched environment that it gave the children and that followed them thereafter. With enhanced abilities in acquiring and developing skills—a must for the modem economy, he noted, citing Sawhill's presentation— the children will be betterprepared adults. “Investments in pre- K,” he concluded, “reduce inequities and promote efficiencies.”

Early advantages accumulate—as do early disadvantages, Heckman suggested, or as he put it in a memorable nutshell, “Skill begets skill.”

He called that developmental idea “a powerful metaphor but also science- based.” Early education raises both cognitive skills—”smarts,” he remarked—and such non-cognitive skills as confidence, motivation, self- control, perseverance, tenacity and expectations for the future. The relation between them—“lifecycle skill formation”—is dynamic.

Impoverishment, which he also called “the accident of disadvantage,” is not about money but about the lack of cognitive and non-cognitive stimulation, and children entering school behind their peers have a hard time catching up. “The real problem,” he said, “is the kids going into the schools, not what the schools are doing or not doing.”

Heckman won the Nobel Prize for his development of theory and methods for analyzing selective samples, and he was also cited for his applied research. For early education, he noted, “the case gets stronger by the hour as the evidence accumulates. The structure of the early years matters.”

Conference attendees also heard from supporters of three current projects: PNC Grow Up Great, a $100-million, 10-year investment in early education by PNC Financial Services Group; First Things First, an early childhood development and health initiative in Arizona, described by Nadine Mathis Basha, a financial supporter of the project and chair of the Arizona State School Readiness Board and member of the state Board of Education; and the £17-billion British investment in preschool, by the Right Honorable Beverley Hughes, the United Kingdom's minister of state for children, young people and families. The speakers described a range of involvement, from policy initiatives to individual volunteers, partners and collaborations across sectors.

But it was the British example that astonished the audience, since it was created as late as 1997, when the government committed to “guaranteed, free, part-time early education for every three- and four-year-old. And when I say ‘universal,' that's what I mean,” Hughes pointed out, since the program enrolls virtually all fouryear- olds and 96 percent of three-yearolds. “We know high-quality, earlyyears provision can improve the life chances of all children, irrespective of background,” she said, “and crucially it can help the disadvantaged and vulnerable children the most.”

She also underscored David Lawrence's observation that universality is a critical component of a preschool investment. “It's essential to have that approach if you're going to make this a political reality,” she said.

The British model, Hughes said, is intended to be comprehensive, because it includes such elements as child care, community centers and extended schooldays for children up to the age of 14 from 8 a.m. to 6 p.m. on weekdays all through the year.

The government's role, she said, is that of “ensuring, not directly providing” the services and standards. “It's a huge, sometimes daunting, agenda,” she said, crediting a “fair political wind” for the headway the program has made in less than a decade.

The experiences of others around the world should be shared, she pointed out: “We must talk together— how to achieve our vision in our different contexts, that vision being high-quality, early-years provision, which is both essential for economic competitiveness and grounded in those values of fairness and opportunity.”

The facts about early childhood “really jump off the page,” noted James E. Rohr, chairman and CEO of PNC Financial Services Group, on introducing Hughes. “We've seen the results—and results are what it's all about. So what needs to happen to make this program happen?”

“This is where money and policy come together,” said Marguerite Sallee, president and CEO of America's Promise—The Alliance for Youth. “Business alone can't solve the problem, government alone can't solve the problem.”

“We're a big country, bigger than England, so it takes a long time to penetrate the public consciousness,'” said Kolb of the Committee for Economic Development, at the conference and also to The New York Times. “The British get it. The French get it. We're the largest economy in the world, and it's outrageous that we don't get it yet. But I'm optimistic.”

Web sites for more information: www.pewtrusts.org; www.ced.org (Committee for Economic Development); www.pncgrowupgreat.com (PNC Grow Up Great); www.surestart.gov.uk (England's pre-K program).

Christopher Connell ([email protected]) writes for Trust from Alexandria, Virginia. Marshall Ledger is editor of Trust.