The Rate of Return to the High/Scope Perry Preschool Program

Abstract

This paper estimates the rate of return to the High/Scope Perry Preschool Program, an early intervention program targeted toward disadvantaged African-American youth. Estimates of the rate of return to the Perry program are widely cited to support the claim of substantial economic benefits from preschool education programs. Previous studies of the rate of return to this program ignore the compromises that occurred in the randomization protocol. They do not report standard errors. The rates of return estimated in this paper account for these factors. We conduct an extensive analysis of sensitivity to alternative plausible assumptions. Estimated annual social rates of return generally fall between 7-10 percent, with most estimates substantially lower than those previously reported in the literature. However, returns are generally statistically significantly different from zero for both males and females and are above the historical return on equity. Estimated benefit-to-cost ratios support this conclusion.

Personality change following unemployment.

“…It is crucial to understand both cognitive skills and personality traits when assessing early-year educational investment on later labor market outcomes (Heckman, Moon, Pinto, Savelyev, & Yavitz, 2010). However, cognitive skills reach stability relatively early in life (Borghans et al, 2008), whereas personality traits continue to change throughout life, and, as demonstrated here, can do so in response to unemployment.…”

Skills, capabilities and inequalities at school entry in a disadvantaged community

“…Additionally, studies of early interventions in the US have shown that such early intervention programmes are both cost effective and efficient. Heckman, Moon, Pinto, Savelyev & Yavitz (2009b) reported an estimated rate of return in the Perry Preschool Programme of between 7 and 10 percent. This suggests that providing early intervention in disadvantaged areas in Ireland may be an effective way of improving the overall level of school readiness in these areas and thus improve later outcomes for disadvantaged children.…”

The share of unemployed people covered by benefits is lower among young people than prime-age adults

“…It often takes intensive, closely targeted programmes with specific methods from a very early age to overcome disadvantage. For instance, some early childhood interventions among poor children in the United States -such as the Perry School Project 12 and, more recently, "Head Start" -have been found to have significant, durable effects on personality traits and social outcomes (Lee, 2008;Heckman et al, 2009). As Section 4 argues, there is also evidence that specialised interventions for adolescents from underprivileged backgrounds can improve skills and social and economic outcomes (also see Kautz et al, 2015).…”