Early childhood education offers powerful 13% return on investment

Investing in high-quality early childhood care and education pays off.

But it’s not just the child who shows great personal gains in areas like academic and social-emotional skills. Rather, research shows that quality care also benefits their family and ultimately leads to better outcomes for society. And those effects last generations.

That was the message Nobel Laureate James Heckman brought to an audience of nearly 400 people on Nov. 19 through a webinar that was sponsored by the Greater Milwaukee Foundation, Milwaukee Succeeds and the Medical College of Wisconsin.

Heckman is a professor of economics at the University of Chicago and is well known for his research on the economic benefits of investing in high-quality early childhood education programs. His research has found that for every dollar spent on high-quality birth-to-five programs, there is a 13 percent annual return on investment due to improvements made in education, health and employment.

“That (ROI) is much greater than most social programs,” Heckman said.

Quality education and care not only provides support for an individual child, he said, but it also benefits mothers. With such support, mothers can go to school or enter the workforce, build their skills and advance in their careers. That ultimately leads to greater income and opportunities for the family.

Those benefits extend beyond one generation too. Heckman studied the effects of high-quality education on a group of 123 Black children in the early-to-mid 1960s who attended a preschool program at Perry Elementary School in Ypsilanti, Michigan. Those original participants are now in their mid-50s and have children of their own. His follow-up research found that the quality education and care the preschoolers received impacted their educational attainment, family stability and health outcomes over the years. Those positive effects were passed on to their children, who also were better educated and healthier, more productive members of society.

Given the impact early childhood education can have on multiple facets of society and multiple generations, Heckman said the case should be made for expanding high quality child care.

“We see a dramatic difference in second generation effects on education, health and crime,” Heckman said. “The case for investing in early childhood education is not just another case of saying here is a government boondoggle.”

The sponsor organizations viewed the event as a call to collective action to support the sector, which is considered critically important and yet has been besieged by myriad challenges.

“Expanding early childhood is one of the most important issues we can tackle as a community,” said Ellen Gilligan, Foundation president & CEO. “It is a key strategic priority for the Foundation, and we’re committed to the work long term. When we can marshal community will and resources around shared goals, our babies, families and community win.”

Prior to the pandemic, access, quality and affordability were all challenges facing Milwaukee’s early childhood education sector. A 2019 report commissioned by the Foundation found that half of Milwaukee’s young children lacked access to high-quality early childhood care due to factors including geographic scarcity and insufficient hours of operation. When COVID-19 struck, the sector was pushed further to the brink. In the spring/early summer, 30 percent of Milwaukee County’s child care providers had closed.

Organizers said they hope to sustain the energy and enthusiasm generated by the event and build a digital movement to invest in equitable early childhood education.

“We cannot stop the conversation we started today,” said Emilie Amundson, secretary of Wisconsin’s Department of Children and Families. “We need to work together and continue to push on this issue to retain the attention of state and federal policymakers on behalf of early care and education.”

Additional resources:

Learn more about Heckman’s research on the value of early childhood education.

Visit the Foundation’s website to read about the work of Milwaukee Succeeds and the MKE Civic Response Team in helping stabilize the early childhood care and education sector.

For a look into the state of the sector in Milwaukee prior to COVID-19, visit the Foundation’s “A Seat at the Table” report.