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The Rate of Return to the High/Scope Perry Preschool Program

Author

Listed:
  • Heckman, James J.

    (University of Chicago)

  • Moon, Seong Hyeok

    (University of Chicago)

  • Pinto, Rodrigo

    (University of California, Los Angeles)

  • Savelyev, Peter A.

    (Virginia Commonwealth University)

  • Yavitz, Adam

    (University of Chicago)

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.

Suggested Citation

  • Heckman, James J. & Moon, Seong Hyeok & Pinto, Rodrigo & Savelyev, Peter A. & Yavitz, Adam, 2009. "The Rate of Return to the High/Scope Perry Preschool Program," IZA Discussion Papers 4533, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4533
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    References listed on IDEAS

    as
    1. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    2. Eliana Garces & Duncan Thomas & Janet Currie, 2002. "Longer-Term Effects of Head Start," American Economic Review, American Economic Association, vol. 92(4), pages 999-1012, September.
    3. Robert A. Moffitt, 2003. "The Negative Income Tax and the Evolution of U.S. Welfare Policy," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 119-140, Summer.
    4. Anderson, David A, 1999. "The Aggregate Burden of Crime," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 611-642, October.
    5. Anderson, Patricia M. & Meyer, Bruce D., 2000. "The effects of the unemployment insurance payroll tax on wages, employment, claims and denials," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 81-106, October.
    6. Browning, Edgar K, 1987. "On the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, vol. 77(1), pages 11-23, March.
    7. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute of Labor Economics (IZA).
    8. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
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    11. Martin Feldstein, 1999. "Tax Avoidance And The Deadweight Loss Of The Income Tax," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 674-680, November.
    12. James D. Rodgers & Michael L. Brookshire & Robert J. Thornton, 1996. "Forecasting Earnings Using Age-Earnings Profiles And Longitudinal Data," Journal of Forensic Economics, National Association of Forensic Economics, vol. 9(2), pages 169-210, April.
    13. MaCurdy, Thomas, 2007. "A Practitioner's Approach to Estimating Intertemporal Relationships Using Longitudinal Data: Lessons from Applications in Wage Dynamics," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 62, Elsevier.
    14. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
    15. Hause, John C, 1980. "The Fine Structure of Earnings and the On-the-Job Training Hypothesis," Econometrica, Econometric Society, vol. 48(4), pages 1013-1029, May.
    16. J. Bradford DeLong & Konstantin Magin, 2009. "The U.S. Equity Return Premium: Past, Present, and Future," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 193-208, Winter.
    17. repec:reg:rpubli:282 is not listed on IDEAS
    18. Clive R Belfield & Milagros Nores & Steve Barnett & Lawrence Schweinhart, 2006. "The High/Scope Perry Preschool Program: Cost–Benefit Analysis Using Data from the Age-40 Followup," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
    19. Barnett, W.S. & Masse, Leonard N., 2007. "Comparative benefit-cost analysis of the Abecedarian program and its policy implications," Economics of Education Review, Elsevier, vol. 26(1), pages 113-125, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    deadweight costs; cost-benefit analysis; standard errors; Perry Preschool Program; compromised randomization; rate of return; early childhood intervention programs;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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