Cost-Effectiveness of Early Childhood Investments in Colorado

1. Cost-Effectiveness of Early Childhood Investments in Colorado Rocky Mountain Early Childhood Conference March 14, 2014 Andrew Brodsky, Ph.D. Simon Workman

2. Agenda Background: Cost-effectiveness of early childhood programs The Colorado Early Childhood Investment Model: Background and methodology Results: Costs and benefits of EC in CO Other EC cost-benefit models Use model to answer specific questions

3. Introductions • Brodsky Research and Consulting • Dynamic cost-benefit models for public programs • Early childhood effectiveness and cost estimation analyses • QRIS and child care quality policy and cost analysis • Research on innovative financing models (SIBs) • APA Consulting • Denver-based education consulting and research firm. • 30 years experience working with legislatures, district and county leaders, business leaders, foundations and others. • Focus on early childhood education, school finance, program evaluation and teacher effectiveness

4. Theoretical Framework and Research Literature • Developmental literature on key years for brain, socioemotional development (e.g., Shonkoff and Phillips, 2000) • Classic preschool longitudinal studies (Abecedarian, High Scope/Perry, Chicago) • Research on effectiveness of early childhood interventions and preschool programs • Economics literature (Heckman)

5. Heckman Curve

6. Colorado Investment Model - Background Funded by Early Childhood Leadership Commission Data and input provided by Colorado EC community, including agencies, providers, foundations, researchers, others Data are from 2011-2012 (depending on source) Available to the public at www.coearlyinvestmentmodel.org

7. Cost-Benefit Model Methodology • Determine Goals and Scope of Project • Purpose, stakeholders, scope, data • Research Review and Data Collection • Child characteristics, funding, costs, current status, cost-benefit parameters • Conduct cost-effectiveness analysis (if necessary) • Derive Formulas to Estimate Cost-Benefit Parameters • Adjust for program alignment, local costs, demographics, quality

8. Return on Investment Incorporates current funding and per-child costs Estimates the economic benefit of current or proposed system Uses high-quality literature to calculate estimated economic benefit of early childhood programs

9. Areas of Economic Benefit • Increased parental employment and economic effects of child care system • Reduced special education and ELL rates • Fewer repeated grades • Increased teacher satisfaction and retention; decreased absenteeism • Reduced pressure on school support • Reduced adoption and foster care • Reduced child abuse • Reduced participation in criminal justice system • Increased graduation rates • Increased future income • Reduced adult crime

10. Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

11. Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

12. Return On Investment (ROI) For Increased Enrollment vs. Improved Quality (Colorado)

13. Time To Break-Even for Preschool Investment

14. Other Cost Estimation Model Applications • Dynamic Early Childhood Cost-Estimation Models • Colorado Early Childhood Leadership Commission • Minnesota Early Childhood Advisory Council • New York Early Childhood Advisory Council • U.S. Office of Child Care • Palm Beach County Children’s Services Council • CO, NY, and Palm Beach County include a ‘Return on Investment’ module

15. Scenarios to Explore What is the current total public investment in early childhood in the state? How much would it cost to provide child care to all children below 100% of poverty? From a cost-benefit perspective, what is the most effective way to invest $10 million in preschool? What would it cost to improve our home visiting system?

16. Contact Details Access the Colorado Early Investment Model at COEarlyInvestmentModel.org Andrew Brodsky andrew@brodskyresearch.com www.brodskyresearch.com 303-579-4173 Simon Workman sjw@apaconsulting.net www.apaconsulting.net 720-227-0097