Working Paper: NBER ID: w15471
Authors: James J. Heckman; Seong Hyeok Moon; Rodrigo Pinto; Peter A. Savelyev; Adam Yavitz
Abstract: This paper estimates the rate of return to the High/Scope Perry Preschool Program, an early intervention program targeted toward disadvantaged African-American youth. Estimates of the rate of return to the Perry program are widely cited to support the claim of substantial economic benefits from preschool education programs. Previous studies of the rate of return to this program ignore the compromises that occurred in the randomization protocol. They do not report standard errors. The rates of return estimated in this paper account for these factors. We conduct an extensive analysis of sensitivity to alternative plausible assumptions. Estimated social rates of return generally fall between 7-10 percent, with most estimates substantially lower than those previously reported in the literature. However, returns are generally statistically significantly different from zero for both males and females and are above the historical return on equity. Estimated benefit-to-cost ratios support this conclusion.
Keywords: Rate of return; Cost-benefit analysis; Standard errors; Perry Preschool Program; Compromised randomization; Early childhood intervention programs
JEL Codes: D62; I22; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| HighScope Perry Preschool Program (I21) | social rates of return (H43) |
| HighScope Perry Preschool Program (I21) | long-term outcomes (I12) |
| HighScope Perry Preschool Program (I21) | crime reduction (K42) |
| HighScope Perry Preschool Program (I21) | educational attainment (I21) |
| HighScope Perry Preschool Program (I21) | benefit-to-cost ratios (H43) |