ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
ECONOMIC DEVELOPMENT
Law and Policy
of Universal
Preschool
AND
EARLY CHILDHOOD
EDUCATION
Law and Policy
of
Universal Preschool
Loyola University
of Chicago
Law School
Dennis K. Winters
Vice President &
Director of Research
10/13/06 October 13, 2006
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
1
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WHAT I WILL DO TODAY
SHOW & TELL
 Show you the fiscal benefits for K-12
 Tell you how to sell this to local constituents
 Show you how the economy is changing
 Tell you why early education is important
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
2
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
THE EVIDENCE IS IN
HUGE RETURNS
• Perry Scope
• 17 : 1
• Chicago-Child
Parent
•
•
$7 to $1 total
$4 to $1 public
• Abecedarian Educational Child Care
• $4 to $1 total
Loyola University
of Chicago
Law School
10/13/06
• Elmira Prenatal/Early Infancy Project
• $5 to $1 total
• $4 to $1 public
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
3
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
BENEFITS ARE SHARED
ACROSS SECTORS
 Personal Success – 20% of gains
• Higher Income
• Better Employment Attributes
• Better Health
 Public Externalities – 80% of gains
• Lower Crime
• Less Social Intervention
• Greater civil contributions
Loyola University
of Chicago
Law School
 Business
• More Skilled Workforce
• Higher Productivity
• Less Turnover
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
4
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL FLOWS IN K-12
• Title
The Economic Returns to Wisconsin’s
Education System from Investment in
Four-year-old Kindergarten
• Sponsors
Trust for Early Education
The Pew Charitable Trusts
Pre-K Now
• Authors
Loyola University
of Chicago
Law School
Professor Clive R. Belfield
Queens College, CUNY
Dennis K. Winters
NorthStar Economics, Inc.
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
5
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
SCOPE OF WISCONSIN STUDY
FISCAL BENEFITS/COSTS
Parameters:
• Wisconsin 2002-03 data
• Benefits Limited to K-12 Fiscal Flows
• State & Milwaukee PS Analysis
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
6
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
ASSUMPTIONS
• Quality Programs
• Trained Staff – BS, Early Ed Certified
• Family Outreach – Home Visits @ 1 per 2 wks
• Universal Offering
• Attracts 32,102 more students
• Brings total to 48,153
• Leaves 29% uncovered, 25,861
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
7
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
PROVISION OF PRE-KINDERGARTEN
COHORT OF 4-YEAR OLDS
Provision Types for 4-year Olds in
Wisconsin
Current
Provision*
Universally
Available 4K
Children aged 4
89,170
89,170
Public Early Childhood Special Education
6,240
(7%)
6,240
(7%)
Federal Head Start
8,026
(9%)
8,026
(9%)
890
(1%)
890
(1%)
4K
16,051
(18%)
48,153
(54%)
No public provision
57,693
(65%)
25,861
(29%)
Wisconsin Head Start
Loyola University
of Chicago
Law School
Note: * Head Start programs are also available for 3-year olds. This table does not include demographic
information on child care provision across the state. Sources: Census (2000); Wisconsin Department of
Public Instruction; NIEER Yearbook (2003).
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
8
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL COSTS & BENEFITS
• Costs
• Quality Staff
• Support Services
• Benefits
• Reduced Special Education
• Reduced Grade Repetition
• Better Teaching Environment
• Higher Job Satisfaction
• Lower Turnover
• Less Need for Substitutes
Loyola University
of Chicago
Law School
• Improved School Environment
• Reduced Support Programs
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
9
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL COSTS
• Costs
• Quality Staff
• Support Services
Unit
Annual
Cost Per
Child
Total Extra
Wisconsin
Investment
($ million)
Milwaukee
District
Investment
($ million)
$3,518
$112.93
$11.29
Guaranteed high quality
4,468
143.43
14.34
Comparable to Head Start
6,445
206.90
20.69
Costing Formulas
(32,102 new pupils statewide,
3,209 for Milwaukee)
Actual
Loyola University
of Chicago
Law School
Notes: ‘Actual’ refers to current 2003 expenditures on 4K. ‘Guaranteed high quality’ requires 27% more resources than are
needed for ‘Actual’. ‘Comparable to Head Start’ assumes that 4K providers will receive funds equivalent to Head Start funding.
Sources: NIEER Yearbook (2003); Marshall et al. (2004); and Head Start data.
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
10
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL BENEFITS
• Benefits
• Reduced Special Education
• Reduced Grade Repetition
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
11
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
SCHOOL SYSTEM FISCAL BENEFITS
BENEFITS
Reduced Special Education
Reduced Grade Repetition
Current
Provision
Cohort Entering
Kindergarten in 2005
with Universally
Available 4K
Results
Students Per Category (%):
Regular education (non-repeater)
83.3
84.1
Special education
14.4
13.8
Repeats 1 grade
2.3
2.1
Costs Per Category:
Regular education (non-repeater)
Loyola University
of Chicago
Law School
10/13/06
$ 94,733
$ 94,733
Special education
$ 181,513
$ 181,513
Repeats 1 grade
$ 101,775
$ 101,775
PV K–12 Expenditures ($ million)
$ 8,431
$ 8,387
PV Cost-Savings ($ million):
Reduction in special education
$ 42.41
Reduction in grade repetition
$ 0.95
Notes: Present Value (PV) figures are discounted over the child’s educational span from K–12 at a discount rate of 3.5%.
Economic values are in 2004 dollars.
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
12
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL BENEFITS (continued)
• Benefits
•Better Teaching Environment
• Higher Job Satisfaction
• Lower Turnover
• Less Need for Substitutes
• Improved School Environment
• Reduced Support Programs
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
13
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL BENEFITS (continued)
BENEFITS
Learning Productivity Increases
($ million)
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
Results
Teacher-related:
Higher job satisfaction
$51.33
Lower teacher turnover
$18.48
Reduced need for substitute teachers
$5.48
School-related:
Improved school safety and climate
Loyola University
of Chicago
Law School
$14.87
System-related:
Reduced pressure for aid programs
$7.44
Notes: Present Value figures are discounted over the child’s educational span from K–12 at a discount rate of 3.5%.
Economic values are in 2004 dollars.
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
14
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
FISCAL COSTS & BENEFITS
BENEFIT/COST ANALYSIS
Present Value Figures
($ million)
Investment (COST)
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
$206.90
School System Benefits:
Loyola University
of Chicago
Law School
10/13/06
Special education placement
$42.41
Grade retention
$0.95
Job satisfaction for teachers
$51.33
Retention of teachers
$18.48
Reliance on substitute teachers
$5.48
Spending on school safety
$14.87
Pressure on school support
$7.44
Total Educational Benefits (BEN)
$140.96
Net Fiscal Impact (BEN-COST)
-$65.94
Benefit–Cost Ratio (BEN/COST %)
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
68%
Economic Development and Early Childhood Education
15
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
MILWAUKEE STUDY
FISCAL BENEFITS
Cost-Savings for Educational Budgets for
Milwaukee from Expanded 4K Programs ($
million)
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
Results
Placement-related:
Lower special education
$5.30
Lower grade retention
$0.44
Teacher-related:
Higher job satisfaction
$5.16
Lower teacher turnover
$1.86
Reduced need for substitute teachers
$0.55
School-related:
Loyola University
of Chicago
Law School
Improved school safety and climate
System-related:
Reduced pressure for support programs
10/13/06
$1.66
$0.83
Notes: Present Value (PV) figures are discounted over the child’s educational span from K–12 at a discount rate of 3.5%.
Economic values are in 2004 dollars.
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
16
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
MILWAUKEE STUDY
FISCAL COSTS & BENEFITS
MILWAUKEE
BENEFIT/COST ANALYSIS
Present Value Figures
($ million)
Investment Cost (COST)
$20.69
Total Educational Benefits (BEN)
$15.80
Net Fiscal Impact (BEN-COST)
-$4.89
Benefit–Cost Ratio (BEN/COST %)
Loyola University
of Chicago
Law School
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
76%
Notes: Present Value figures are discounted over the child’s educational span from K–12 at a discount rate of 3.5%.
Economic values are in 2004 dollars.
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
17
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
WISCONSIN STUDY
FISCAL COSTS & BENEFITS
• Costs
• $207 million
• Benefits
• $141 million
• Net Cost
• $66 million
• Returns 68 cents on the dollar
• Returns 76 cents on the dollar for Milw
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
18
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
FISCAL COSTS & BENEFITS
PERSPECTIVE
• $66 million < 1% of State Education Budget
• Huge Returns to Individual and Society
• Imperative to Workforce Development
• Imperative to Economic Development
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
19
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WISCONSIN STUDY
EXPANDED COSTS & BENEFITS
BENEFIT/COST ANALYSIS
Present Value Figures($ million)
Cohort Entering
Kindergarten in 2005 with
Universally Available 4K
Results
Investment (COST)
$206.90
Total School System Savings (BEN)
$140.96
OTHER BENEFITS
Tax Revenue Gains
48.44
Criminal Justice System
142.18
Health Expenditures Savings
Loyola University
of Chicago
Law School
7.00
Total Other Benefits
$197.62
Grand Total Benefits
$338.58
Net Fiscal Impact (BEN-COST)
$131.68
Benefit–Cost Ratio (BEN/COST %)
1.64
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
20
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
HOW DO YOU
SELL
EARLY EDUCATION
TO
YOUR
CONSTITUENCIES?
Loyola University
of Chicago
Law School
 PUBLIC
 BUSINESS
 LEGISLATURE
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
21
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
EVOLUTION OF
ECONOMIC PROSPERITY
• 19
Century –
 Bigger and Better Farms
th
• 20
th
• 21
st
Century –
 Bigger and Better Factories
Loyola University
of Chicago
Law School
Century –
 Bigger and Better Ideas
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
22
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
U.S. SECTOR EMPLOYMENT TRENDS
(% SHARE)
100
Law and Policy
of Universal
Preschool
80
Other (Retail, Construction, Government, etc.)
60
Private Services
40
20
Loyola University
of Chicago
Law School
Manufacturing
Agriculture
0
1900
1950
2000
YEAR
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
23
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMY
CHANGED CONSTRUCT
Old Economy
New Economy
•
•
•
•
•
•
•
•
Raw Materials
Cost Race to Bottom
Workers Chased Jobs
Quality of Life was
luck of the draw
QoL attracts talent
Businesses Chase Talent
Value-Added Products
Brain Power
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
24
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
DESIGNED HERE
MANUFACTURED THERE
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
 Designed in California
 Assembled in China
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
25
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
KATHLEEN
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
26
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
Workforce development
and
economic development
are
interrelated and interdependent.
Loyola University
of Chicago
Law School
Ed = ED
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
27
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMY
TALENT BASED
Carly Forina, former CEO HP –
Don’t show me your highway
interchange or TIF district, show
me the number of college graduates
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
28
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMY
HIGHER SKILL SET REQUIRED
"The days are over when you could walk
into a paper mill with a high school
diploma and run one of the machines."
– Patrick Schillinger, Wisconsin Paper Council President,
Center will teach paper-industry technology,
Milwaukee Journal Sentinel, JS Online, October 21, 2004.
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
29
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMY
NEED FOR CREATIVITY & INNOVATION
“Today in most fields I know, the
struggle is about creativity and
innovation. There is no script.”
Loyola University
of Chicago
Law School
– Robert B. Shapiro,
former CEO & Chairman,
Monsanto Corporation
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
30
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
WORKPLACE REQUIREMENTS
CHANGES IN SKILLS USED AT WORK*
* Based on the Dictionary of Occupational Titles
Nonroutine interactive
Law and Policy
of Universal
Preschool
Nonroutine analytic.
Routine manual
Routine cognitive
Nonroutine manual
Loyola University
of Chicago
Law School
Source: Autor, Levy and Murnane, 2003.
10/13/06
Source: K-12 Education and Economic Summit presentation by Alan B. Krueger, Princeton University
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
31
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMY
SCARCITY OF SKILLED WORKERS
Former Federal Reserve Chairman Alan Greenspan voiced his
concern about a growing earnings gap between highly
skilled and unskilled workers.
"It's a problem caused basically by our skill
mix not keeping up with the technology
that our capital stock requires," the
Republican Fed chairman said. . . .
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
32
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
THE NEW ECONOMIC EQUATION
Law and Policy
IN A KNOWLEDGE-BASED ECONOMY
of Universal
Preschool
BRAIN
POWER
=
EARNING
POWER
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
33
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
10/13/06
Source: K-12 Education and Economic Summit presentation by Alan B. Krueger, Princeton University
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
34
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
THE EARNINGS GAP HAS WIDENED
REAL $ TERMS
Education
.
10/13/06
Difference
(2004 Dollars)
(High School vs.
Other Degree)
1975
2004
1975
2004
$27,538
$28,631
n/a
n/a
Some College
$29,452
/ Asso. Degree
$32,010
$1,914
$3,379
High School
Loyola University
of Chicago
Law School
Income
Bachelors
$43,298
$51,568
$15,760
$22,937
Advanced
$58,721
$78,225
$31,183
$49,594
Source: US Census Bureau; Postsecondary Education Opportunity
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
35
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
MEDIAN FAMILY INCOME
BY EDUCATIONAL ATTAINMENT
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
10/13/06
Source: U.S. Census Bureau
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
36
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
TAXES
25%
Law and Policy
of Universal
Preschool
(college graduates)
OF THE
WORKFORCE PAYS
51%
Loyola University
of Chicago
Law School
OF THE
INCOME TAXES
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
37
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
LOW INCOME GROWTH LEADS TO :
DETERIORATION OF ECONOMIC CONDITION
AND QUALITY OF LIFE
 Lower per capita income
 Decreased tax base / Budget deficits
 Lower bond ratings
 Decreased school funding and teacher salaries
 Less & fewer public services
Loyola University
of Chicago
Law School
 Lower quality of life
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
38
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
THREE TALENT OPTIONS
FOR PRODUCTION
 Import the talent
 Export the job
Loyola University
of Chicago
Law School
 Grow the Talent here
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
39
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WHY IS
EARLY EDUCATION
IMPORTANT?
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
40
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WHY EARLY EDUCATION?
AN EARLY FULCRUM
 Third Grade Reading Skills
 Learn to Read
Read to Learn
 Forty-Minute Assessment

80% Accurate
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
41
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
ACHIEVEMENT GAP
ESTABILISHED EARLY
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
42
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
ACHIEVEMENT GAP
DEPENDENT ON THE MOTHER’S EDUCATION
Law and Policy
of Universal
Preschool
Loyola University
of Chicago
Law School
10/13/06
Source: Prof. James Heckman, Nobel Laureate, University of Chicago
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
43
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
POVERTY v. EDUCATION
USE THE CORRECT POLICIES
 Ed
≠ f (Poverty)
 Poverty
= f (Education)
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
44
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
NEW ECONOMIC DEVELOPMENT MODEL
USING THE RIGHT TOOLS
• Traditional
economic development tools
produce a zero public return or worse.
– See A. Rolnick, Federal Reserve Bank of Minneapolis
• Returns
to high-quality early-childhood
initiatives produce huge returns.
Loyola University
of Chicago
Law School
−and
Perry Preschool 40-year study reports $17-to-$1 total
$13-to-$1 public benefit-cost ratios.
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
45
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
WHAT MORE DO YOU NEED?
THE QUESTIONS HAVE BEEN ANSWERED
 What are the returns?
17: 1 returns; 80% to the Public
 Is it fiscally prudent?
 Tiny fraction of total public school funding
 What is the greatest job need?
 Skilled, creative, interactive occupations
 What is your alternative investment?
Loyola University
of Chicago
Law School
 Not a new mall !
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
46
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
EARLY CHILDHOOD EDUCATION
BETTER SOONER THAN LATER
• Postponing the Investment
only postpones the Rewards
• It’s Good for Kids,
It’s Good for Business,
It’s Imperative for the Future
Loyola University
of Chicago
Law School
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
47
ECONOMIC
DEVELOPMENT
AND
EARLY
CHILDHOOD
EDUCATION
Law and Policy
of Universal
Preschool
 Dennis K. Winters, Vice President & Director of Research
 Phone: (608) 441-8060
 Email: nstar@northstareconomics.com
 University
Loyola
of Chicago
Law
 School
Fax: (608) 441-8064
Website: www.northstareconomics.com
10/13/06
© Copyright 2006, NorthStar Economics, Inc. All rights reserved.
Economic Development and Early Childhood Education
48