Modeling The Costs and Benefits of Early Childhood Systems

1
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_at_brodskyresearch.com

2
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)

3
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)

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Heckman Curve
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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

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Cost-Benefit Model Methodology

• Determine Goals and Scope of Project
• Purpose, stakeholders, scope, data
• Research Review and Data Collection
• Child characteristics, funding, costs, current
  status, cost-benefit parameters
• Conduct cost-effectiveness analysis (if
  necessary)
• Derive Formulas to Estimate Cost-Benefit
  Parameters
• Adjust for program alignment, local costs,
  demographics, quality

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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)

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Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
Return Type Return Per Dollar Invested (USD) Return Per Dollar Invested (USD) Return Per Dollar Invested (USD)
Return Type 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
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Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
Return Type Return Per Dollar Invested (USD) Return Per Dollar Invested (USD) Return Per Dollar Invested (USD)
Return Type 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
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Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
Return Type Return Per Dollar Invested (USD) Return Per Dollar Invested (USD) Return Per Dollar Invested (USD)
Return Type 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
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Time To Break-Even for Preschool Investment
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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

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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

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Challenges and Opportunities in LAMI Countries

• Challenges
• 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

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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

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Questions?

• Contact Info
• Andrew Brodsky
• andrew_at_brodskyresearch.com
• Website/blog www.brodskyresearch.com