America’s Future Early Education System

HOW MUCH WILL IT COST TAXPAYERS?

The bill to taxpayers will depend on specific details, but a rough estimate is 1% of GDP, or $160 billion, per year.

There are two ways to reach this number. First, our public spending on K-12 education is about 4% of GDP, or $600 billion.²² There are 50 million students in our public K-12 schools (the enrollment rate is 85-90%²³), so public expenditures come to about $12,000 per student. There are around 16 million children aged one to four. Suppose 75% enroll in early education; that’s 12 million children. If we spend $12,000 per child, the same as for K-12 schools, total spending would be around $145 billion. We’ll want a better teacher-child ratio for early education, which will increase the cost a bit, though user fees will help cover this.

Second, public expenditure on early education in Denmark and Sweden is about 1.5% of GDP.²⁴ We’re likely to end up with more private provision and we have a larger per capita GDP, so 1% of our GDP might well be sufficient to create a system that approximates theirs in quality and accessibility.

Note that my estimate of the cost is far higher than that of recent proposals by the Obama administration and the Center for American Progress.²⁵ That’s because those proposals are for relatively small additions to our current system.

How much will taxes increase for individual households? If the distribution of new tax payments needed to fund early education is the same as for existing tax payments, households in the bottom fifth of incomes will pay $133 more per year, those in the lower-middle fifth $333, those in the middle fifth $666, those in the upper-middle fifth $1,266, and those in the top fifth $4,200.²⁶ These amounts are fairly small — an advantage of spreading the bill across the population.²⁷ And actual increases in tax payments probably would be even smaller, since we already spend some public money on early education.

Over the long run, universal early education may pay for itself via increased employment and productivity.²⁸ Even if it doesn’t, however, it’s well worth doing in order to improve work-family balance and equality of opportunity.

SO WHAT’S NOT TO LIKE?

I see seven principal objections to universal publicly-funded early education for the United States.

First, when someone suggests borrowing a policy or institution from the Nordic countries, skeptics immediately point out that these countries are very different from America. They’re small, they’re more ethnically and racially homogenous, and their cultures and histories are quite distinct from ours. What works there, in other words, won’t necessarily work here.

That’s true. But it doesn’t justify blanket skepticism about borrowing. We need to consider the particulars of the policy in question. There is no reason to think a system of publicly-funded early education centers (schools) can function effectively only in a small homogenous country. France does this, even though it’s a pretty large nation. Belgium does too, despite its diversity.²⁹ And we do a reasonably good job ourselves with kindergartens and elementary schools. Education experts and ordinary Americans routinely profess dissatisfaction with our K-12 public schools. But recall the evidence I mentioned earlier: inequality in capabilities expands when children aren’t in school (before kindergarten and during summers), while K-12 schools hold it at bay. American schools could be better, to be sure, but for less advantaged children they are, even in their current condition, far more helpful than the likely alternative.

A second objection is that we don’t know how large the impact of early education will be in boosting the capabilities of children from less advantaged families. The expectation of a sizeable effect is compelling, and we have supportive evidence from K-12 schooling, from three high-quality early education programs, and from cross-country comparison. But that evidence is limited.³⁰

Though this is a legitimate concern, it shouldn’t dissuade us. Equalizing opportunity is such a prized goal that even a modest improvement would be valuable. And regardless of its impact on opportunity, early education will be of considerable benefit in helping parents balance work and family.

Third, some contend that more government spending and higher taxes will hurt the economy. But the relevant evidence says otherwise. Over the past century the United States has shifted from a country with a small government to one with a medium-sized government, but our long-term rate of economic growth hasn’t slowed. And among the world’s rich nations, those with larger governments have tended to grow just as rapidly as those with smaller governments.³¹

Fourth, some believe government provision of services and benefits weakens families.³² If parents have access to affordable good-quality childcare and preschool, will they be less likely to stay together or get married in the first place? That’s conceivable, but the historical and comparative evidence suggests reason for skepticism. Enrollment in elementary and secondary schools grew steadily in the United States from the late 1800s until around 1960, but it was in the 1960s, after the rise in school enrollment slowed sharply, that rates of divorce and out-of-wedlock birth shot up.³³ And more children grow up with both parents in Denmark, France, and Sweden, each of which has a universal early education system, than in the United States.³⁴

Fifth, some worry about rent-seeking if a substantial amount of early education is publicly provided. Public-sector employees may be able to get above-market pay and benefits, increasing the cost to taxpayers.³⁵ The evidence on this is mixed.³⁶ But suppose we as a collectivity do end up paying more than we need to. The question is whether the outcome is worth it. My judgment is yes. It’s the same with our military, police protection, fire fighting, medical care, K-12 schooling, and others. These services yield immense individual and social benefits, and I’m willing to bear a slightly elevated cost in order to ensure that all Americans have access to them.

A sixth objection suggests that publicly-provided services tend to be of low quality. Yet the evidence from our public K-12 schools offers cause for optimism. While there is lots of room for improvement, they do help to equalize opportunity. They also, of course, facilitate employment by parents. Public early education will do the same.

Finally, why not just give the money to parents and let them choose whether to use it on early education or on something else? The reason is that if early education has individual and social benefits, it makes sense to require that the money be used for that and only that. The same is true of safety (military, police), infrastructure (roads, bridges), health insurance (Medicare, Medicaid), and K-12 schooling, among others. Though paternalism is a dirty word for some, a key purpose of government is precisely to help us do things we might not choose on our own.

It’s worth emphasizing that having a universal early education system doesn’t mean anyone will be forced to use it. Parents who prefer to stay home with their children during the first five years will still be able to do so.

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