bang for your buck

Investing early in quality child care for at-risk kids pays off big later, research finds

A staff member works with preschoolers at Educare Denver at Clayton Early Learning.

New research reveals that despite hefty up-front costs, quality child care programs for disadvantaged children starting just after birth and continuing to age five produce major financial dividends over the long term.

Such programs yield an annual return of 13 percent per child — generating $6.30 for every $1 initially invested in the program, according to the research by University of Chicago economist James Heckman.

The rate of return, which Heckman described as “huge,” is significantly higher than the 7 to 10 percent rate he found in previous research focusing just on the impact of preschool.

“We think this is very strong evidence for supporting this kind of program going forward,” Heckman said during a media briefing Thursday.

The study, released Monday, was authored by Heckman and other researchers from the University of Chicago and the University of Southern California. Heckman is known for his groundbreaking research on the economics of early childhood education.

With many cities and states focused on the expansion of full-day kindergarten or preschool in recent years, the new findings bolster arguments for early childhood investments that also cover kids’ first three years.

“The public policy literature has understated the importance of the very early years,” Heckman said.

At the same time, the study further documents the non-educational benefits of quality child care for at-risk children, particularly when it comes to long-term health outcomes.

“We’re seeing an improved human being in terms of the health capacity…at age 35,” said Heckman. “That’s a big benefit and it’s not a benefit that’s been considered in looking at these early childhood programs in the past.”

He said the research team’s projections show lower risk of diabetes, cancer and heart disease among children who attended the high-quality programs studied, as well as a reduction in unhealthy habits like smoking and drug use.

”What we found is a substantial reduction in those health costs and a much healthier workforce going forward,” he said.

The new study compared children who attended two intensive child care programs in North Carolina starting in the 1970s — the Carolina Abecedarian Project and Carolina Approach to Responsive Education — with those in a control group who had lower-quality child care arrangements.

In 2014 dollars, the annual cost of the intensive programs would be more than $18,000 per child.

In addition to providing full-day, full-year care and regular health exams to the children, the two programs provided child care subsidies to the parents, enabling them to work. Researchers followed participants from eight weeks old until age 35, examining a variety of outcomes, including educational attainment, earnings, health and involvement in crime.

While the early intensive programs benefitted all children, they benefitted boys most.

Heckman said the finding points to the likelihood that boys are more vulnerable and less resilient than girls if placed in low-quality child care settings.

“There do seem to be more harmful consequences for boys than for girls,” he said.

Although the two programs studied operated 40 years ago, the research team noted that such comprehensive birth-age 5 programs exist around the world today. Heckman cited the national Educare network of model child care centers as one example.

Denver’s Clayton Early Learning houses one such center and President and CEO Charlotte Brantley said she welcomed the new study.

“The research is absolutely telling us this is worth the upfront investment,” she said. “I applaud him for coming out one more time, saying this yet again.”

Brantley said there are few programs as comprehensive as Clayton in the state, though some full-day, full-year Head Start and Early Head Start programs may offer something similar.

Clayton, which offers care for infants starting at six weeks of age, provides extensive staff training, in-depth assistance for parents and has very low staff-child ratios. Brantley said the center recently embarked on a pilot project to train other providers on some of Clayton’s key practices.

year in review

Early childhood discipline, child care deserts and funding challenges in the spotlight during 2017

Malanna Newell is a toddler teacher at the Mile High Early Learning center in Denver's Westwood neighborhood. She started as a teaching assistant before taking Mile High's Child Development Associate training last fall.

Amid national debate on the disproportionate number of suspensions and expulsions given out to young boys and children of color, Colorado lawmakers and educators grappled with the best approach to discipline in 2017.

The year kicked off with a bill in the legislature to curb suspensions for early elementary and preschool students — a shift that would have put Colorado on the forefront of school discipline reform, some observers said. Although the bill had a broad array of backers, a Republican-controlled Senate committee killed the proposal after last-minute opposition from a group of rural school district leaders. Some of those leaders said suspensions weren’t a “rural problem,” but a Chalkbeat analysis found otherwise.  

Despite the defeat, advocates of the bill expect a renewed push for the measure during the 2018 legislative session.

In the meantime, Colorado’s two largest school districts — Denver and Jeffco — spearheaded changes to reduce the number of suspension handed out to young children. In June, Denver’s school board instituted a policy limiting the suspension of preschool through third grade students, though some educators worried they weren’t being given enough support to handle kids who misbehave.

In Jeffco, after Chalkbeat wrote about the district’s high rate of early elementary suspensions, administrators commissioned a report on the issue with recommendations to increase the use of restorative justice practices and other alternatives to suspension.  

Also in 2017, local early childhood leaders launched or expanded efforts to address key problems in the field — including teacher recruitment and retention and kids’ sometimes rocky transition to kindergarten.

At the same time, some early childhood advocates were forced to reckon with the perennial lack of funding that plagues the industry and constricts families’ choices. One of Denver’s most well-known child care providers, Clayton Early Learning, closed one of its two facilities last summer — a move observers said spotlights the high cost of quality child care.

But there were also bright spots in the funding landscape — some growing out of local efforts in Colorado’s rural towns and resort communities. A preschool in Holyoke found a way to give staff members generous raises and a growing number of cities and towns are getting new dollars for early childhood programs through sales or property taxes.

In Denver, several efforts — using a combination of public and private funds — aim to improve child care options in the city’s Elyria-Swansea neighborhood, which is designated a “child care desert.”

At the state level, officials promoted recently-created financial incentives for child care centers with top quality ratings, though some providers say earning those ratings is too much work.

Looking ahead to 2018, early childhood advocates hope to renew a tax credit that helps child care providers make ends meet. Plus, winners of a new early childhood innovation competition will get financial help to scale up their ideas.

Giving Quest

Advocates push to extend tax credit to encourage donations to cash-strapped child care providers

PHOTO: Porter-Leath

A wide-ranging coalition that includes early childhood, education and business groups is galvanizing support for a bill to extend a state tax credit that incentivizes donations to Colorado child care providers.

Advocates say the Child Care Contribution Tax Credit, which will be up for reauthorization during the 2018 legislative session, represents a key tool for supporting an expensive but perpetually underfunded sector.

“It’s the child care provider’s lifeline to additional funding,” said Gloria Higgins, president of the business group Executives Partnering to Invest in Children, or EPIC.

It’s a public-private partnership of sorts — with the state rewarding private citizens and businesses with lower tax bills when they support early childhood education.

During fiscal year 2016, Colorado taxpayers made about $52 million in donations that qualified for the tax credit, according to data from the Colorado Department of Revenue. Donations can cover costs such as child care scholarships, teacher salaries and building improvements.

“If parents had to pay $50 million more for child care, I don’t know what they would do,” Higgins said.

The tax credit, which first took effect in 1999 and has been reauthorized once, allows donors to claim an income tax credit worth up to 50 percent of their contribution. In other words, a donation of $200 to a qualifying child care provider would yield a state tax credit of $100 for the donor.

Donations to a variety of organizations — including child care centers, programs offering before- and after-school care, residential treatment centers and homeless youth shelters — are eligible for the credit.

The tax credit was suspended for a couple years during the Great Recession because slow-growing state revenue triggered a special provision in the law. The credit was restored in phases starting in 2013 and will expire in 2019 if it’s not reauthorized.

Given the state’s historically bipartisan support for the tax credit, advocates are hoping for a smooth passage.

“The reason why some people like tax credits … really comes from the fact that you’re just declining revenue,” said Bill Jaeger, vice president of early childhood initiatives at the Colorado Children’s Campaign. “You’re not necessarily building new government programs.”

And for taxpayers who make the donations, the philosophy is about “letting people keep more of money they’ve earned,” he said.

Currently, there is no organized opposition to renewing the tax credit for another 10 years.

Still, advocates know there are many demands for state dollars.

“We, in early childhood, are truly competing … with potholes or K-12 education,” Higgins said. “We just want to hold onto what we have.”

Colorado is one of only a handful of states that offer tax credits to individuals or businesses that donate to child care providers or related programs, according to the National Conference of State Legislatures. Oregon, Mississippi, Louisiana and Pennsylvania all have some version of a contribution credit, though generally the parameters are more restrictive than in Colorado.

Tami Havener, who leads a nonprofit that offers full-day preschool and a host of other early childhood services in Steamboat Springs, believes the tax credit encourages supporters to donate more than they otherwise would.

“I think it definitely makes a difference in them deciding how much they can give,” she said. “It allows them to be more generous.”

The Family Development Center where Havener is executive director raises about $110,000 a year — in amounts ranging from $25 to $30,000. The money helps pay for need-based scholarships, teacher training and extra staff so that student-teacher ratios stay low.

The preschool enrolls 80 students, about one-third of whom come from low-income families.

Havener said she’s gotten more savvy in recent years about advertising and explaining the credit to donors because she realized that some didn’t understand the financial benefits.

Now, in addition to helping specific child care providers, some groups envision the credit as a way to get communities to collaborate on larger child care initiatives. The idea is to use the credit as a rallying point for donors interested in pooling their resources for big projects — say, building a child care facility in a neighborhood without one.

“This is no silver bullet by any stretch,” Jaeger said. “It’s a tool in the toolbox.”