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April 4, 2014
ROI of
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Workforce development and
economic development are
interrelated and interdependent.
Ed = ED
Wisconsin is Open for Business
April 4, 2014
ROI of
ECL WHAT IS THE BEST ECONOMIC
INVESTMENT TOOLAVAILABLE?
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EARLY EDUCATIONHUGE RETURN ON INVESTMENT
$15,
166
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000
Costs
Benefits
Total return = $258,888; $17.07 per dollar invested: $12.90 to the public, $4.17 to participants
Welfare Education Earnings Taxes paid Crime(Per participant in 2000 constant dollars discounted 3% annually)
Larry Schweinhart, Larry Schweinhart, High/Scope Educational Research Foundation, High/Scope Educational Research Foundation, www.highscope.orgwww.highscope.org
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HIGH/SCOPE PERRY PRESCHOOL ECONOMIC EFFECTS
20%
50%
13%
7%
62%
41%
76%
36%
29%
72%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Never on welfare asadult
Had Savings Account
Own home
Earn > $2K/mo.
Employed
Program groupNo-program group
Barnett, W.S. (1996). Lives in the balance: Benefit-cost analysis of the Perry Preschool Program through age 27. Monographs of the High/Scope Educational Research Foundation. Ypsilanti, MI: High/Scope Press. Graphic from National Institute for Early Education Research.
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April 4, 2014
ROI of
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ABECEDARIANACADEMIC BENEFITS
13%
51%
65%
49%
36%
67%
34%
31%
0% 10% 20% 30% 40% 50% 60% 70% 80%
4 Yr College
HS Graduation
Grade Repeater
Special Education
Program groupNo-program group
Barnett, W. S., & Masse, L. N. (2007). Early childhood program design and economic returns: Comparative benefit-cost analysis of the Abecedarian program and policy implications, Economics of Education Review, 26, 113-125; Campbell, F.A., Ramey, C.T., Pungello, E., Sparling, J., & Miller-Johnson, S. ( 2002). Early childhood education: Young adult outcomes from the Abecedarian Project. Applied Developmental Science, 6(1), 42-57. Graphic from National Institute for Early Education Research.
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ECONOMIC RETURNSTO EARLY INTERVENTION
Cost Benefits
B/C
Perry Pre-K $15,386 $262,642 17.1
Chicago P/C $ 7,384 $ 74,981 10.1
Elmira Prenatal $ 7,109 $ 49,217 6.9
Abecedarian $35,864* $130,666 3.6
Nurse-Family $ 9,118 $ 26,298 2.9
*Marginal cost, net or existing child care costs.
Barnett, W. S., & Masse, L. N. (2007). Early childhood program design and economic returns: Comparative benefit-cost analysis of the Abecedarian program and policy implications, Economics of Education Review, 26, 113-125; Belfield, C., Nores, M., Barnett, W.S., & Schweinhart, L.J. (2006). The High/Scope Perry Preschool Program. Journal of Human Resources, 41(1), 162-190; Temple, J. A., & Reynolds, A. J. (2007). Benefits and costs of investments in preschool education: Evidence from the Child-Parent Centers and related programs. Economics of Education Review, 26(1), 126-144.
(In 2002 dollars, 3% discount rate)
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WISCONSIN STUDYFISCAL FLOWS IN K-12
• TitleThe Economic Returns to Wisconsin’s Education System from Investment in Four-year-old Kindergarten
• SponsorsTrust for Early EducationThe Pew Charitable TrustsPre-K Now
• AuthorsProfessor Clive R. BelfieldQueens College, CUNY
Dennis K. WintersNorthStar Economics, Inc.
http://dpi.wi.gov/ec/ec4yrpag.html
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WISCONSIN STUDYEXPANDED COSTS & BENEFITS
BENEFIT/COST ANALYSISPresent 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 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
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ROI of
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FISCAL COSTS & BENEFITSPERSPECTIVE
• $66 million < 1% of State Education Budget
• Huge Returns to Individual and Society
• Imperative to Workforce Development
• Imperative to Economic Development
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WHAT MORE DO YOU NEED?THE QUESTIONS HAVE BEEN ANSWERED
What is the greatest job need? Skilled, creative, interactive occupations
What are the returns?17: 1 returns; 80% to the Public
Is it fiscally prudent? Tiny fraction of total public school funding
What is your alternative investment?
Not a new mall !
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April 4, 2014
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Third Grade Reading Skills
Learn to Read Read to Learn
WHY EARLY EDUCATION?AN EARLY FULCRUM
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ACHIEVEMENT GAPESTABILISHED EARLY
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ACHIEVEMENT GAPDEPENDENT ON THE MOTHER’S EDUCATION
Source: Prof. James Heckman, Nobel Laureate, University of Chicago
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POVERTY v. EDUCATIONUSE THE CORRECT POLICIES
Ed ≠ f (Poverty)
Poverty = f (Education)
Wisconsin is Open for Business
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“By 5, it is possible to predict, with depressing accuracy, who will complete high school and college and who won't.”
– David Brooks, David Brooks: Schools and Skills
The New York Times; Editorial
WHAT THEY SAY
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April 4, 2014
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Questions ?
Wisconsin is Open for Business
April 4, 2014
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Dennis Winters
Phone: 608-267-3262
Email: [email protected]
Website: www.dwd.wisconsin.gov
OEA website: www.dwd.wisconsin.gov/oea
CONTACT INFORMATION