Investing in Early Childhood Education Now
Saves $100,000 Per Detroit Child Later, New Study Shows
A new, comprehensive study challenges us to invest in early childhood programs now so we can save significant taxpayer dollars and community resources in the future.
The study was commissioned by the Max M. & Marjorie S. Fisher Foundation and is called “Cost savings of school readiness per additional at-risk child in Detroit and Michigan.” It was released on April 25 and it marks the first time that the economic value of early childhood education has been quantified through a rigorous methodology.
"The lifetime economic value of investing in school readiness for just one more child at risk of academic failure in Detroit is a conservative estimate of about $100,000,” the study concludes. For Michigan in general, the investment returns a savings of $39,500 per child. A one-percent gain in school readiness among Detroit children would save the State $7.2M. The same gain among Michigan children overall would return a $55.3M dividend.
“The return on investment for ensuring the success of even one child is extremely high,” said Phillip Fisher, vice chair of the Max M. & Marjorie S. Fisher Foundation board. “The long term savings to our city and state make early childhood investments critically important.”
The savings are calculated on the basis of reduced spending on human and health services, public assistance, remedial education programs, juvenile and adult justice systems, and other taxpayer-funded programs that individuals who have failed academically are more likely to use. In addition, young children who are “ready to learn” are more likely to graduate from high school later, and eventually enter the workforce and contribute to the tax base.
“Policymakers, business leaders and the nonprofit community should carefully consider the per-child savings documented in this study as they look for ways to help Detroit and Michigan grow,” said Ric DeVore, PNC regional president for Detroit and Southeast Michigan.
Southwest Solutions is a leading provider of effective early childhood programs in Detroit, and we fully support the findings and recommendations of the study.
“As the State faces difficult budgetary decisions, we must prioritize programs that are important for the long-term socio-economic vitality of the community and its families,” said Donna Cielma, head of the Children, Youth and Families division of Southwest Solutions. “Investing in early childhood education makes sound and strategic financial sense, as the research unequivocally shows.”
The cost for two years of Head Start is about $15,000 per child. Applying the Fisher study metric, each taxpayer dollar invested in early childhood education in Detroit returns about $7 in future taxpayer savings.
The Fisher study was conducted by Wilder Research. More than 20 organizations have formally endorsed the results. They include: