Investing in Children: Evidence of Long-Term Financial Outcomes from the HighScope Perry Preschool Project

Last week, NPR treated listeners to an interesting broadcast that touted preschool as potentially the best job-training program. This isn't really news to our friends in the Early Educational Initiative, who have been advocates for early childhood education for some time. Nor is it news to Robert Fulghum, who taught us in his 1988 book that all we really needed to know in life we learned in kindergarten. NPR's broadcast featured interview clips with researcher and economist James Heckman who summarized findings from the longitudinal study of the HighScope Perry Preschool Project. Why are we highlighting it on the Asset Building Program's blog? Because the recently published study by Heckman and colleagues analyzes the relationship between preschool and several economic indicators, including employment, earnings, and assets. You can dowload NPR's broadcast on the right side of this page (or click here) and read more about the findings below.

Study Design

In the 1960's, five cohorts of African-American children between ages three and four from neighborhoods surrounding Perry Elementary School were enrolled into the HighScope Perry Preschool Project, an intervention aimed at testing the effects of early childhood education on long-term outcomes. Aside from being African-American, additional eligibility criteria for participation included having an IQ between 70 and 85 (two standard deviations below average) and being considered disadvantaged in terms of parents' employment, education, and number of household members divided by number of rooms. The 123 participating children (a relatively small sample) were randomly assigned to either a treatment or control group. Children in the treatment group attended preschool two-and-a-half hours each day five days a week and had weekly home visits from teachers, while those in the control group did not attend preschool or receive home visits. After the intervention, children in the treatment and control groups enrolled in kindergarten and grew up alongside one another. Outcomes for children were measured every year through age 15 with other follow-ups occurring at ages 19, 27, and 40. At age 40, researchers still were able to measure outcomes for 91% of the original sample.

Researchers used rigorous methods to perform random assignment. In general, one of the purposes of random assignment is to make sure children in treatment and control groups are similar based on the characteristics that are observed, like IQ, household income, or gender, as well as the characteristics that arenot observed, like motivation or patience. This is sometimes referred to balancing the sample, i.e., creating two statistically similar samples based on observed and unobserved characteristics.

What Researchers Found

Children in the treatment group had significantly better educational, employment, earnings, and assets outcomes compared with children in the control group. There were also differences by gender.

Females in the treatment group were significantly less likely to be classified as mentally impaired or learning disabled, to be held back in school and significantly more likely to graduate from high school and had significantly higher GPAs. They were significantly more likely to be employed at ages 19 and 27. Females in the treatment group earned significantly more money each month at age 27. They were also less likely to be unemployed for an entire year at age 40.

Females in the treatment group were also significantly more likely to have a savings account at age 27. More specifically, females were 50% more likely to have a savings account at age 27 when they went to preschool in the HighScope Perry Preschool Project. They owned cars more often than their counterparts in the control group; however, this difference was not statistically significant. They were less likely to ever have received welfare between ages 18 and 27.

Findings were similar for males in the treatment group. Specifically, males who participated in the treatment group of the HighScope Perry Preschool Project earned 50% more salary at age 27 compared with those in the control group. They were also significantly more likely to own savings accounts and cars at both ages 27 and 40.

What Does this Mean?

Investing in children—even children as young as preschool age—for just a few hours each week could be really important for their long-term educational and financial outcomes. What would financial outcomes have looked like had HighScope Perry incorporated things like financial education and savings accounts into their curriculum for children?

Things to Keep In Mind

Findings suggest preschool may be important for long-term outcomes. But we should keep in mind that these findings are based on a relatively small sample of African-American children who were quite disadvantaged compared to the wider African-American population in terms of IQ, parents' employment and education, and household size. Furthermore, random assignment may have been compromised because it did  not produce a completely balanced sample between treatment and control groups. This means that children in treatment and control groups may have differed in important ways and it may be these differences, not the HighScope Perry Preschool Project, that produced the findings. However, researchers conducted additional procedures to minimize concerns about random assignment.