Return On Investment


Every $1 invested in high-quality pre-k produces a return-on-investment (ROI) of approximately $7. Pre-k results in savings by reducing the need for remedial and special education, welfare, and criminal justice services.

The Chicago Longitudinal Study reported a $7.14 to $1 benefit-cost ratio for high-quality pre-k (Reynolds, Temple, Robertson, & Mann, 2002). The Chicago pre-k programs in this study were similar to Alabama's First Class Pre-K program in design and cost. Other benefit-cost analyses, such as that of the Perry Preschool Program (Schweinhart, Montie, Xiang, Barnett, Belfield, & Nores, 2005) have produced much higher estimated returns, up to $16 to $1. Taking into consideration these and other studies, the $7 to $1 figure is a reasonable estimate for the returns to public investment in one year of high-quality pre-k.

Resources:

Business Case for Pre-K
NEW Alabama School Readiness Alliance brief summarizes the research and gives concrete examples of how Alabama businesses are helping to expand access to high-quality pre-k. 

Business Education Alliance 
Learn more about the ROI of high-quality pre-k from Alabama's Business Education Alliance  

ReadyNation
A business partnership for early childhood and economic success

Dollars and Sense: A Review of Economic Analyses of Pre-K
Albert Wat, Pre-K Now, May 2007

Economics of Pre-K in Alabama: Results and Analysis
M. Keivan Deravi, Ph. D., Professor of Economics, Auburn Montgomery, October 2007

Timothy Bartik: The economic case for preschool
VIDEO: In this well-argued talk, Timothy Bartik makes the macro-economic case for preschool education — and explains why you should be happy to invest in it, even if you don't have kids that age (or kids at all). The economic benefits of well-educated kids, it turns out, go well beyond the altruistic. (Filmed at TEDxMiamiUniversity.)