Economic Benefit of Early Childhood Education

Most national governments have ratified the various international agreements that recognize the importance and vulnerability of children. Most recognize that special attention most go towards developing an effective educational system to tackle the complexity involved in human development. However, for most national governments, often the benefits of early childhood education (ECE) is not viewed from the child’s perspective, but from the economic benefit that comes with a highly educated adult workforce.

“Learning…”, by Steven King, Cambodia 2010

The most striking evidence comes from the Perry Preschool Program study that measured the economic return-on-investment of implementing the ECE program. A benefit-cost analysis was conducted and found that the program yielded public benefits of $105,324 per participant with the average cost of $14,716 per participant, a cost-benefit ratio of 7.16 to 1 (Schweinhart, 2003). The benefits were estimated in seven categories: custodial child care value, reduced costs of K-12 education, reduced costs of adult education, increased costs of college education, increased earnings and fringe benefits, decreased costs of crime, and decreased costs of welfare (Barnett, 1998).

The estimated rate of return on preschool education exceeds the average rate of return on investments in the stock market over the past 30 years.
Click here to see a detailed chart of the Perry Preschool Program Cost/Benefit Analysis

Each one of those indicators would speak volumes to a politician that is deciding on policies to reduce and prevent poverty, but even more so, the return-on-investment is quite striking. If an educational advocate would were to speak to a politician that was primarily economically driven, s/he would speak to the fact that the estimated rate of return on preschool education exceeds the average rate of return on investments in the stock market over the past 30 years (Barnett, 1996).


While studies in the United States of America indicate strong support for ECE because of its economic benefits, there is another side to consider. While economic benefits bring prosperity to a nation as a whole, it sometimes brings costs to some cultural groups.

In Andhra Pradesh in India, there are substantial increases in enrolment into private schools that instruct in English. Parents are tantalized by the prospects of preparing their children for the global workforce that is predominantly English-speaking (Woodhead, 2009). As such, policymakers are integrating English into its ECE centres to prepare children for the English-speaking private schools. Studies indicate that most of the students in the private schools are male, whereas most of the female students are enrolled in the government-run schools. Furthermore, there is a gap between children living in poverty attending government-run schools and children from more advantaged families attending the English-speaking private schools.

This is indicative of a cycle that reaffirms the status quo between the haves and the have-nots. Those children that are stuck in the poverty cycle are not showing short-term economic benefits and are thus being left behind.

Considering the various benefits to implementing an effective ECE, it is evident that governments have enough reason to enact educational policies that favor the early years. Apart from the economic benefits and the possibility to break deeply entrenched poverty cycles in marginalized populations, a universal ECE should be implemented solely when considering the individual child’s right to a fair and high-quality education.

For more information, check out UNICEF’s Early Childhood page.


Barnett W. S. (1996). Lives in the balance: age-27 benefit–cost analysis of the High/Scope Perry Preschool program. Monographs of the High/Scope Educational Research Foundation (No. 11). High/Scope Press: Ypsilanti, MI.

Barnett, S. (1998). Long-Term Cognitive and Academic Effects of Early Childhood Education on Children in Poverty. Preventive Medicine 27, pp. 204-207. Rutgers-The State University of New Jersey, New Brunswick, New Jersey.

Schweinhart, L. J. (2003). Benefits, costs and explanations of the High/Scope Perry Preschool Program. Paper presented at The Meeting of the Society for Research in Child Development, Tampa, FL, April.

Woodhead, Martin (2009). Pathways through early childhood education in Ethiopia, India and Peru: Rights, equity and diversity. Young Lives Working Paper 54. Young Lives, University of Oxford, Department of International Development.

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