Head Start and Education

¶ … benefit analysis of whether the state of Alabama should fully fund an expanded preschool program. Various arguments for and against this idea are discussed. Arguments for increased funding of the state's prekindergarten program include: improved educational success and achievement; significant reduction of the need for grade retention; improved economic status; better health; less need for welfare; and reduced crime rates. Arguments against are mainly based on the huge initial cost of investment that such a program would require. In the end, various calculations find that the benefits outweigh the costs in the ratio of 2 to 1. Several other comprehensive studies on the topic also support the fact that benefits of fully funded State preschool program would significantly outweigh the costs. Studies, tables and calculations are used to support this claim. The challenges that would be faced in the implementation of such a program are then discussed. In the end a conclusion on the matter is given.

Introduction to Pre-K Program in Alabama

Alabama's Office of School Readiness (2012) defines school readiness as a state in which children enter school with: optimal health; eagerness to learn; and age-appropriate physical, social, communication, emotional, and problem solving skills. In order to make the children ready for school, certain qualities need to be promoted in them and these include the following: responsibility, independence, decision-making ability, creativity, sociability or social skills, curiosity and exploration. In addition, for a School Readiness program to be successful, cooperation from external factors is paramount. And these include cooperation among the parents, teachers, State and Local Communities. Simply put, a school-ready child is one who is ready to learn. Such a child will experience fewer challenges in his or her learning experience. Making sure that children are ready to learn can help in building healthier local and state communities through (Office of School Readiness, 2012): Improving educational success and achievement; significantly reducing the need for retention/ remediation; improving socioeconomic status, and; Encouraging a positive sense of responsibility.

Quite a number of studies have shown that children who take part in quality pre-school programs (Alabama Early Education Department, 2016): Are more likely to achieve educational success; Are not likely to require remedial programs or to repeat a grade; Have a higher chance of graduating high school and proceeding to college; Will be well paid as adults, and; Have very low likelihood of going to prison or of having to survive on welfare.

Discussions

Need for Publicly Funded Pre-kindergarten

OSR (Office of School Readiness, Alabama) funds high quality pre-K programs through a competitive grant application process. Grants are funded by state funds appropriated through the Alabama legislature each year (Alabama Department of Early Childhood Education, 2016). Significant public investment in quality pre-k programs results in a wide range of benefits not only for the children and their families but also for the society. Studies have shown that kids, regardless of their economic background, participating in quality pre-school programs are more likely to score better in achievement tests than those who do not attend such programs. Children who attend quality preschool programs are also less likely to repeat a grade, be placed in special education or suffer abuse and neglect (Lynch & Vaghul, 2015). This shows that if public funding for such programs was increased to expand access to pre-K programs then there will be reduction in the need for child protection or welfare services.

When children attend high-quality pre-school programs they are also less likely to be involved in crime which would reduce crime levels. Such children are also more likely to successfully finish high school and go to college. Such individuals also have a higher likelihood of getting higher salaries once they graduate and of being in better health. It is obvious that any government would prefer such a situation compared to any other alternative. As mentioned above, most of these benefits can only be attained when the children go through high-quality pre-school programs. Lower-quality programs which are the result of poor funding can achieve some of these benefits but not all of them (Lynch & Vaghul, 2015).

Supporting Literature

Here is a summary of the literature study done to assess the costs and benefits of prekindergarten programs across the U.S.

A study by Stephen, Salaway, and Suen Hoi (2009), reveals a number of findings on the state of preschool funding in Pennsylvania. The first is that the Prekindergarten program in Pennsylvania serves about ten thousand children. The state provides funding for a network of pre-k schools and other supporting infrastructure. An evaluation of the state's pre-k program revealed that there was a 20% decrease in the number of kids categorized as at risk or developmentally delayed. The pre-k children who participated in the study were also found to perform better than average academically and had significantly reduced percentages of those being assigned to special education or repeating grades (Stephen, Salaway, & Suen Hoi, 2009).

A similar but more comprehensive study by Gregory, Varghas, and Barnett (2010) on the impact of preschool programs found that such programs had significant impact on the social skills, cognitive outcomes and achievement tests on children who attended them before starting kindergarten. The fact that these findings were consistent across the 120 studies analysed in a meta-analysis done by the three researchers only goes to emphasise that pre-kindergarten programs bring about real benefits to children.

Universal programs such as those at the District of Columbia and the state of Oklahoma that offer children from all backgrounds access to preschool programs, have been able to achieve enrolment rates of over 90% of 4-year-olds (a count that includes Head Start). Other programs that have expanded eligibility beyond just children from lower socioeconomic backgrounds such as those in Texas, West Virginia, Wisconsin, and Vermont have also recorded significantly improved enrolment rates (Steven, Carolan, Fitzgerald, & Squires, 2012). Another study by Robert (2004), found that the returns on investment in high-quality universal prekindergarten programs, such programs often create billions of dollars of returns in spite of the huge up-front investments required.

Need for CBA (Cost-Benefit Analysis)

A recent article published by Arthur Rolnick and Rob Grunewald both of whom are employees of the Federal Reserve Bank of Minneapolis assesses the costs and benefits associated with prekindergarten programs. The two authors point to the fact that many studies have concluded that quality prekindergarten programs have resulted in huge savings on taxes and economic gains for the participating children and their families. The savings have been made through the reduction in the need for special education, lower likelihood of such children being arrested or ending up in prison (reduced costs on the government), and the fact that these children are more likely to be healthy and to get into well-paid positions- meaning that they are likely to pay more in taxes (Programs, 2016).

Costs Associated

Below are all the costs associated with a universal preschool program. All of these direct and indirect costs have been overestimated in order to arrive at the highest totals for such a program. To arrive at the total costs to the state economy, the total estimated costs of the universal preschool program have been subtracted from the state's pre-k expenditure and the economy's current expenditures (Aguirre, et al., 2006).

The total expenditure on both private and public owned pre-k programs in Alabama is $807,800,222.07. With the approximate costs of a universal preschool program in the state being $1,289,517,591.33, the difference between the two figures is $481,717,369.26 or an increase of 59.6%. The annual increase in government funding can be arrived at by subtracting Alabama's current outlays for 4-year-olds in its public preschool program ($437,817,580.86) from the estimated costs of the proposed universal program. The difference is $851,700,010.47 or a 66% increase in costs. If the state of Alabama was to adopt this proposed program and to take care of all the expenses required for the program, one of the places it could get additional money to cover the increase in costs is from the state and federal CCDF (Child Care and Development Funds) (Aguirre, et al., 2006). See Figure 1 in the appendix.

In the 2004-2005 financial year, for example, the state of Alabama allocated $113,964,190 to CCDF while the federal government provided $391,328,745 in CCDF. Since both governments' method of allocating CCDF are unclear and appear not to be based on individual ages, it would be difficult to know which portion of these monies should be subtracted for 4-year-olds. Furthermore, even though it is assumed in the calculations that all 4-year-olds will enter the universal preschool program, some parents may still prefer to send their children to private pre-k schools that do not fall within the proposed universal program (Aguirre, et al., 2006). Therefore, even if the CCDF allocations methods were clear, there would still be a need to approximate the number of children who are currently enrolled in private preschool child care institutions who will move to the proposed program (Aguirre, et al., 2006).

Analysing the CBA

In the last few years, dozens of local and state governments have considerably increased their prekindergarten funding. Are the costs really justified by the expected benefits? This question will be answered by looking at the predicted long-term benefits of the proposed pre-K program in the state of Alabama, through reduction in criminality and earnings increases and comparing looking at these benefits against the costs of the program (Bartik, Belford, Gormley, & Anderson, 2016).

For a prekindergarten program to be successful and to bring about significant benefits there is a need for the government to allocate adequate resources to make sure that the program is of high quality. Enrolment of 18 children in all OSR classrooms is expected. This provides a 9 to 1 teacher/child ratio. Head Start classrooms may have no more than 20 children in their classroom which will insure a 10:1ratio, however, they may request permission from Head Start to remain at 18 (Alabama Department of Early Childhood Education, 2016).

Two costing models are used in this study to calculate the real cost. These models have been borrowed from a similar state's current outlays for closely related educational programs. The first model assumes that a quality prekindergarten program would cost as much as Head Start, while the second model assumes that such a program would cost as much as one academic year of K-12. In both Head Start and a year of K-12, the cost is significantly higher compared to the money spent on any of the three prekindergarten programs currently being implemented in Alabama. Based on these two models, there would be a need to invest an extra 10 to 120 million dollars annually for every age cohort to support and finance the suggested prekindergarten program (Belfield, An Economic Analysis of Pre-K in Louisiana, 2005).

Economic Benefits of Pre-K for Alabama

The economic impacts of these programs are calculated by assuming that the program is implemented on a full-scale basis. Full scale implementation of a universal prekindergarten program means that there is sufficient space in the program all 4-year-year olds whose families choose the program. Statistics from states with voluntary prekindergarten programs including Alabama itself indicate that 70% of all four-year-olds are enrolled in such programs. A full-scale high-quality universal prekindergarten program would definitely increase the enrolments rates. Even though it would cost a lot of money to set up and implement such a program there will be huge returns on the investments. For example, a recent study revealed that for every dollar invested in pre-K programs that there is a 2 to 3 dollar Return on Investment in terms of increased earnings for a state's residents. A quality universal pre-K program would have a return of 2.78 dollars for every dollar spent. Rolling out a full-scale universal prekindergarten program across the state would increase the value of the state's residents' earnings by about 1%. The long-term economic benefits to the state and the nation's economy would be in the region of hundreds of billions of dollars annually (Bartik, Early Childhood Programs as an Economic Development Tool: Investing Early to Prepare the Future Workforce, 2015).

These are conservative estimates just to show the bare minimum of what is to be expected. For example, the potential benefits that could result from state residents reinvesting some of the money realized from their higher pay have not been included. This goes to show that the economic development benefits of a quality pre-K program have the potential to continue growing and become even larger after some time. These economic development benefits show that whatever dollar is spent on preschool education is repaid multiple times. Modest implementation of such programs is not likely to result in any huge success. If policymakers want to see these huge benefits they should be ready and willing to make the large investments needed for full-scale implementation of a high-quality state-wide universal pre-K program (Bartik, Early Childhood Programs as an Economic Development Tool: Investing Early to Prepare the Future Workforce, 2015).

First Class Pre-K programs shall provide meaningful opportunities for families to be involved in their child's education. First Class programs shall develop a comprehensive plan for family involvement to implement strategies designed to develop partnerships with families and build reciprocal relationships that promote shared decision-making (Alabama Department of Early Childhood Education, 2016). Individuals with higher levels of education are more likely to live longer. They are also less likely to be unhealthy or to depend on government-backed healthcare programs than those with lower levels of education. Studies have concluded that learning increases the sense of control of individuals in their lifestyle choices. It also enriches their lives on various levels resulting in improved health. In Sweden each extra year of education reduced the risk of being unhealthy with more than 18%, and back here at home, every additional year of education cuts the risk of death in the next ten years by 3.6% (Mitra, 2011).

Benefits of Early Childhood Development Programs

Researchers who have analysed quality preschool child development programs have strongly concluded that such programs have substantial benefits. Long-term studies of children who enrolled in such high-quality programs have revealed that these such programs have multiple significant benefits not only for the children, but also their parents, families and the society (Lynch & Vaghul, 2015).

These benefits include (Lynch & Vaghul, 2015): Better educational success including less grade repetition rates, less number of children being placed in special education and a higher number of students graduating; Increased levels of social, verbal, intellectual and mathematical achievement; Better health; Less need for welfare; Greater employment opportunities and earnings; Lower rates of crime; and Increased tax collection and lower government expenditures. See Figure 2 in appendices for more detail on the benefits to the state of Alabama and to the nation in general

Sensitivity Analysis

A sensitivity analysis for the robustness of the above-mentioned economic benefits under different assumptions and specification was done and it revealed that the program benefits exceeded the costs, even under very conservative assumptions. See sensitivity analysis Figure 3 in appendix.

The first model (model 1) shows that the benefits clearly outweigh the costs of investing in an expanded preschool program. The current cost of investing in the program is 410 million dollars (spread over a period of two years). The economic benefits will come about in four main ways. The first is that the education system will save about 242 million dollars, the second is that governments will be able to collect tax revenues of approximately 140 million dollars. Third, the criminal justice system would save a minimum of 375 million dollars and lastly, the Health Care system will save 25 million dollars. The total financial benefits would be 782 million dollars. The net financial cost savings against an investment cost of 410 million dollars would be 372 million dollars (using a five percent discount rate). This brings about a benefit to cost ratio of 1.91 to 1. In other words, the benefits would be 1.91 times greater than the cost of investment (Belfield, Investing in Early Childhood Education, 2005).