THE MAGIC OF COMPOUNDING INTEREST TRANSFERS TO PRESCHOOL

“Poverty is Not Just a Hopeless Condition.” - James Heckman, Nobel Laureate in Economics

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The Benefits of preschool education provided to children from economically disadvantaged households extend to three generations and the whole of society. This is what long-term studies have proven.

We’ve all heard the advice to invest young to enjoy the magic of compounding interest to increase our savings. When we invest in quality preschool and care for a young child in need this also provides magical compounding benefits – for not only that child, but their parent(s) and that child’s future children. The resulting benefits to that preschooler and their family snowball into related societal benefits of increased tax revenue and decreased social supports. Picture of Grandparents, parent and child. Text: "Did you know...? Preschool benefits 3 generations The Parent(s) The Preschooler The Preschooler's Future Family Spread the word!" with The Blue Rose Foundation logo

 

THREE GENERATIONS BENEFIT

The Preschooler…

When a child in need gets the opportunity to  attend quality preschool, like so many of their eventual kindergarten peers, their chances to thrive in school and later in life increase. Children learn more words, letters, numbers and basic social skills. They know how to act in class, are familiar with the roles of the teachers, other students, and rules of class, and participate in school activities. Children who attend preschool are less likely to fall behind in kindergarten, avoiding the educational gap.  If the educational gap is not closed by 3rd grade, it becomes almost impossible for these children to catch up, creating a drain on school funding and increasing the odds of a child developing low self esteem and behavioral issues that can have a negative impact on the whole class. (Source 1, 2, 3)

The Parent(s)…

When a child from an economically disadvantaged family is provided the opportunity to to attend preschool it sets in motion the opportunity for  that child’s parent(s) to provide a better life for that family. The parent is now free to pursue employment or education to seek better future employment. Single mothers were able to earn more and rely less on government assistance. For a teenage mother whose child was given the chance to attend a quality preschool, by the time their children were 4 ½,  the mother was more likely to have finished high school and undergone post-secondary training, more likely to be self-supporting, and less likely to have more children.  Additional training, employment experience, and education led to increased earnings and decreased reliance on social assistance. (Source 1, 2)

The Preschooler’s Future Children…

The Perry Preschool Project (PPP) is the longest-running longitudinal study in early education. It started in 1962 with the aim to determine if access to high-quality education could have a positive impact on preschool children and their communities.

The study continues to prove that investing in high-quality early education yields positive results for the participants’ children and families. Children of the PPP graduates fared statistically significantly better than their counterparts who didn’t have the same head start. When the study checked in with the graduates of the PPP later in life, 60% of the participants were never suspended, arrested or addicted, compared to 40% of their counterparts. 59% percent were full time or self-employed compared to 42%. While all children of PPP participants fared better than their nonparticipant counterparts, sons of fathers who participated fared the best. (Source)  


AND THE REST OF US (AKA SOCIETY)

Investing in early childcare and education produces significant economic returns.

“The rate of return for investment in quality early education for disadvantaged children is 7-10% per annum through better outcomes in education, health, sociability, economic productivity and reduced crime.” 

– James Heckman      

Nobel Laureate in Economics

The Perry Preschool Program participants were less likely to rely on social services after the age of 20 and the Abecedarian Project shows single mothers are able to earn more and rely less on government assistance

The economic benefit [is] clear. For every dollar spent on the program, taxpayers saved $2.50 as a result of higher incomes, less need for educational and government services, and reduced health care costs. In short, the project has demonstrated that high-quality, enriched early education environments can help children surmount some of the disadvantages of poverty. Not only can the effects be far-reaching as children progress through adulthood, but the long term savings to society also can be considerable. And 2014’s new findings suggest those benefits both to people who receive high-quality education and care and to society at large may be even more comprehensive than research previously has shown. (Source)

Even if education is not a passion, everyone should join us in the decision to invest in preschool. It only makes sense (and cents) for us all.

 

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