Investments in Prevention for Children Based on Cost-Benefit Analyses

• High-quality early childhood education programs for three- and four-year-old children ($94 billion over five years);
• Nurse home-visiting programs to promote sound prenatal care and the healthy development of infants and toddlers ($14 billion over five years);
• School reform with an emphasis on programs in high-poverty elementary schools that improve the acquisition of basic skills for all students ($17 billion over five years); and
• Programs that reduce the incidence of teenage pregnancy ($8 billion over five years).
• Total per year: $28 billion
• Savings range from $2.16 to $17 per program for each dollar invested

(source: Brookings Institution)

Resources that Document Cost Effectiveness

The Federal Reserve Bank of Minneapolis has issued a paper "Early Childhood Development: Economic Development with a High Public Return" contending that early childhood programs should be at the top of economic development lists for state and local governments. It cites findings that "well-focused investments in early childhood development yield high public as well as private returns." Its website also reports on the Bank-sponsored conference on "The Economics of Early Childhood Development." 

The business group, Committee for Economic Development, emphasizes that "we know more than enough to take action now to improve early education," and it lays out a set of principles upon which we believe high-quality, universally-available preschool education should be built. It calculated that the monetary benefits (to the government, to program participants and their mothers, and to crime victims) exceeded the costs per child by a factor of 4 to 1.

Fight Crime: Invest in Kids is a national anti-crime organization of over 2,000 police chiefs, sheriffs, prosecutors, and victims of violence. It issues research reports on the cost effectiveness of early childhood programs. A research brief, “Investments in Children Prevent Crime and Save Money,” lays out the evidence that quality early childhood programs, child care, and after-school programs not only produce benefits to those children who receive them, but save money and protect society by preventing crime.

The Finance Project assembles useful cost-effectiveness information. Particularly helpful is the monograph A Stitch in Time: Calculating the Costs of School Unreadiness, by Charles Bruner. It seeks to assist states and communities in using available information and evidence to make the case for investments in early childhood by focusing on the investment potential of early childhood services to school readiness and other desired results.

The following reports from 2004-2007 document the positive economic returns of early intervention and prevention programs in various states in the USA. Returns usually vary from $1.50 to $17.00 for every dollar invested.

• Cost-effective Investment in Children
• Federal Reserve Bank of Minneapolis 2006
• Rand Corporation studies on Return On Investment (.pdf)
• Return On Investment in Connecticut 2007
• Return on Investment in Michigan 2005 (.pdf)
• Washington State Institute for Public Policy 2004