Modeling The Costs and Benefits of Early Childhood

Systems

Presentation to the Asia-Pacific Regional Conference on Early Childhood Development

Singapore

November 18-20, 2013

Andrew Brodsky, Ph.D.andrew@brodskyresearch.com

Types of Cost Analysis

• Simple cost analysis (from perspective of system or agency)• Cost-effectiveness analysis (per-child costs to achieve a

particular outcome)• Cost-benefit analysis (requires quantifying benefits in

monetary figures)

(Karoly et al., 2001)

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Theoretical Framework and Research Literature• Developmental literature on key years for brain, socioemotional

development (e.g., Shonkoff and Phillips, 2000)• Classic preschool longitudinal studies (Abecedarian, High Scope/Perry,

Chicago)• Recent research in developed and LAMI countries on ECD

interventions - meta-analyses show effect size of .3 - .4 (Engle et. al, 2007, 2011)• Conceptions of ECD as intrinsic or instrumental (Britto et al, 2013) • Economics literature (Heckman)

Heckman Curve

Long-Term Benefits of ECD

• Reduced participation in special education• Higher secondary graduation rates• Reduced participation in criminal justice system• Fewer repeated grades• Higher income in adulthood

Cost-Benefit Model Methodology

1. Determine Goals and Scope of Project• Purpose, stakeholders, scope, data

2. Research Review and Data Collection• Child characteristics, funding, costs, current status, cost-benefit parameters• Conduct cost-effectiveness analysis (if necessary)

3. Derive Formulas to Estimate Cost-Benefit Parameters• Adjust for program alignment, local costs, demographics, quality

Amount of ECD Funding Across System• Absolute amount seems large ($4 billion for New York)• ECD investment is very small compared to K-12 system• NY:

• ECD investment is $2,754 per child• K-12 investment is $19,076 per child

• Most ECD resources go to early learning (in New York, 78% of EC system)

Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

Return TypeReturn Per Dollar Invested (USD)

Current System Increased Enrollment

Improved Quality

Overall $8.79

Child Care Industry $1.13

Future Income $1.56

Repeated Grades $0.08

Special Education $0.48

Graduation Rates $0.05

Child Welfare $0.85

Criminal Justice $0.39

Reduced Welfare $1.73

Taxes $0.26

Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

Return TypeReturn Per Dollar Invested (USD)

Current System Increased Enrollment

Improved Quality

Overall $8.79 $6.50

Child Care Industry $1.13 $0.86

Future Income $1.56 $1.19

Repeated Grades $0.08 $0.06

Special Education $0.48 $0.37

Graduation Rates $0.05 $1.72

Child Welfare $0.85 $0.04

Criminal Justice $0.39 $0.65

Reduced Welfare $1.73 $0.30

Taxes $0.26 $1.32

Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

Return TypeReturn Per Dollar Invested (USD)

Current System Increased Enrollment

Improved Quality

Overall $8.79 $6.50 $13.82

Child Care Industry $1.13 $0.86 $1.98

Future Income $1.56 $1.19 $2.49

Repeated Grades $0.08 $0.06 $0.12

Special Education $0.48 $0.37 $0.76

Graduation Rates $0.05 $1.72 $3.59

Child Welfare $0.85 $0.04 $0.08

Criminal Justice $0.39 $0.65 $1.35

Reduced Welfare $1.73 $0.30 $0.62

Taxes $0.26 $1.32 $2.75

Time To Break-Even for Preschool Investment

Commonalities of LAMI and Wealthy Countries• ECD in LAMI nations has similar goals to Head Start (Britto and

Gilliam, 2008)• Many goals of ECD are universal (such as Millennium Development

Goals, economic growth, or school readiness)• Attention to systemic or holistic approach • Undergirded by developmental literature

Issues Specific to LAMI Countries

• How is Quality Defined?• High-income countries: safety, teacher-child interactions, content knowledge

(Britto et al., 2011)• LAMI countries: feeding and care, survival issues, health service provider

training, infrastructure development, attention to physical growth

• Sensitivity to Local Contexts• Great diversity within LAMI countries• Metrics of success should be tied to local context

• Balance between local and universal sociocultural values

Challenges and Opportunities in LAMI CountriesChallenges• Data collection/evaluation and monitoring systems• Research base is less developed• Sociocultural issues• Trust!

Opportunities• Children with greatest needs show greatest benefits• Need for ECD research in developing world• Increasing attention to evidence-based policymaking

Recommendations

• Use Holistic or Systemic Approach• Involve a Wide Range of Stakeholders• Outcome Metrics Should Reflect Both Universal Goals and Local

Culture • Adjust Parameters To Fit Local Context• Develop Comprehensive Communication and Outreach Strategy

Questions?

Contact Info:

Andrew Brodskyandrew@brodskyresearch.com

Website/blog: www.brodskyresearch.com

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