Cost-Effectiveness of Early
Childhood Investments in Colorado
Rocky Mountain Early Childhood Conference
March 14, 2014
Andrew Brodsky, Ph.D.
Simon Workman
Agenda
• Background: Cost-effectiveness of early
childhood programs
• The Colorado Early Childhood Investment
Model: Background and methodology
• Results: Costs and benefits of EC in CO
• Other EC cost-benefit models
• Use model to answer specific questions
Introductions
• Brodsky Research and Consulting
–
–
–
–
Dynamic cost-benefit models for public programs
Early childhood effectiveness and cost estimation analyses
QRIS and child care quality policy and cost analysis
Research on innovative financing models (SIBs)
• APA Consulting
– Denver-based education consulting and research firm.
– 30 years experience working with legislatures, district and
county leaders, business leaders, foundations and others.
– Focus on early childhood education, school finance,
program evaluation and teacher effectiveness
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)
• Research on effectiveness of early childhood
interventions and preschool programs
• Economics literature (Heckman)
Heckman Curve
Colorado Investment Model Background
• Funded by Early Childhood Leadership
Commission
• Data and input provided by Colorado EC
community, including agencies, providers,
foundations, researchers, others
• Data are from 2011-2012 (depending on
source)
• Available to the public at
www.coearlyinvestmentmodel.org
Cost-Benefit Model Methodology
1. Determine Goals and Scope of Project
– Purpose, stakeholders, scope, data
2. Research Review and Data Collection
– Child characteristics, funding, costs, current status, costbenefit parameters
– Conduct cost-effectiveness analysis (if necessary)
3. Derive Formulas to Estimate Cost-Benefit
Parameters
– Adjust for program alignment, local costs,
demographics, quality
Return on Investment
• Incorporates current funding and per-child
costs
• Estimates the economic benefit of current or
proposed system
• Uses high-quality literature to calculate
estimated economic benefit of early childhood
programs
Areas of Economic Benefit
• Increased parental
employment and
economic effects of child
care system
• Reduced special
education and ELL rates
• Fewer repeated grades
• Increased teacher
satisfaction and
retention; decreased
absenteeism
• Reduced pressure on
school support
• Reduced adoption and
foster care
• Reduced child abuse
• Reduced participation in
criminal justice system
• Increased graduation
rates
• Increased future income
• Reduced adult crime
Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
Return Per Dollar Invested (USD)
Return Type
Current System
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
Increased Enrollment
Improved Quality
Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
Return Per Dollar Invested (USD)
Return Type
Current System
Increased Enrollment
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
Improved Quality
Return On Investment (ROI) For Increased
Enrollment vs. Improved Quality (Colorado)
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
Time To Break-Even for Preschool
Investment
Other Cost Estimation Model Applications
• Dynamic Early Childhood Cost-Estimation Models
–
–
–
–
–
Colorado Early Childhood Leadership Commission
Minnesota Early Childhood Advisory Council
New York Early Childhood Advisory Council
U.S. Office of Child Care
Palm Beach County Children’s Services Council
• CO, NY, and Palm Beach County include a ‘Return
on Investment’ module
Scenarios to Explore
• What is the current total public investment in
early childhood in the state?
• How much would it cost to provide child care
to all children below 100% of poverty?
• From a cost-benefit perspective, what is the
most effective way to invest $10 million in
preschool?
• What would it cost to improve our home
visiting system?
Contact Details
Andrew Brodsky
[email protected]
www.brodskyresearch.com
303-579-4173
Simon Workman
[email protected]
www.apaconsulting.net
720-227-0097
Access the Colorado Early Investment Model at
COEarlyInvestmentModel.org