The Fiscal Effects of Investing in High-Quality Preschool Programs

Source: William T. Dickens, Charles Baschnagel, Brookings Institution, CCF Briefs, no. 42, April 16, 2009

From the summary:
Randomized treatment-control experiments suggest large returns to investments in prekindergarten education. Several studies consider the social benefits of such investments, but none have considered the full potential gains to government budgets. We embed estimates of the effects of two model programs in a growth model of the U.S. economy to judge the impact they would have on federal, state and local government budgets. Assuming a 3 percent discount rate we find that both programs would pay back in reduced costs and increased revenues in excess of three-fourths of their costs within a seventy-five year budget window. Both programs would eventually reap a positive return for government budgets if policymakers were sufficiently patient.

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