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New Economic Analyses Reveal the American Families Plan is a Lasting Investment

A fresh look at data from the Perry Preschool Project shows that the investments made in the American Families Plan would produce intergenerational benefits for the country.

Debra Pacchiano September 20, 2021
  • Early Learning and Care
  • Policy and Systems
  • Research
  • Blog

At first glance, the price tag for the transformative investments in early childhood care and education included in the American Families Plan looks steep: $450 billion. And with the significant federal spending, policy scope and potential for tax increases included in President Biden’s $3.5 trillion economic package, we should be having conversations about whether this is where we want to invest our tax dollars.

This June, economists Jorge Luis García, Frederik H. Bennhoff, Duncan Ermini Leaf and Nobel laureate James Heckman released a National Bureau of Economic Research (NBER) working paper that demonstrates these investments in early learning and care could produce incredible returns.

The paper returns to the Perry Preschool Project, an intervention in the 1960s where a randomized group of students who received two years of preschool sessions on weekdays and weekly teacher home visits, beginning at age 3. Because the study has followed participants into their 50s, economists can now examine the impacts the program had on the siblings and the children of the original participants, who are now well into their adulthoods.

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Their conclusion: the Perry Preschool Project produced dynastic benefits within the first generation (intragenerational) and across multiple generations (intergenerational). The life-cycle benefits of the program include increases in labor income, reductions in crime and in the cost of the criminal justice system. The program also led to improved health and health behaviors. In addition, because the siblings and children of the original participants had higher incomes, they also were able to focus on health and actually logged higher medical expenditures.

As a result of these dynastic benefits, these economists revised the return on investment of the Perry Preschool Project, now estimating that for every $1 invested in the Perry Preschool Project generates $9 in returns to society.

The research makes the proposed federal investments in quality early childhood and care an even smarter investment. Starting early benefits all of us, as it sets children, families and communities up for success for generations to come.

About the Author

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Debra Pacchiano

Former Vice President, Translational Research

Debra Pacchiano, Ph.D leads the development of the Start Early’s The Essential 0-5 Survey, a system to measure organizational conditions essential to continuous improvement in early childhood education.

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