Piling On–Further Evidence Of The Desirability of Universal Pre-School Education

In the last round of NBER papers, Heckman and Raut find more evidence that pre-school education has a significant pay-off and worth putting public investment into (abstract; emphasis added):

Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model
James J. Heckman, Lakshmi K. Raut

This paper formulates a structural dynamic programming model of preschool investment choices of altruistic parents and then empirically estimates the structural parameters of the model using the NLSY79 data. The paper finds that preschool investment significantly boosts cognitive and non-cognitive skills, which enhance earnings and school outcomes. It also finds that a standard Mincer earnings function, by omitting measures of non-cognitive skills on the right hand side, overestimates the rate of return to schooling. From the estimated equilibrium Markov process, the paper studies the nature of within generation earnings distribution and intergenerational earnings and schooling mobility. The paper finds that a tax financed free preschool program for the children of poor socioeconomic status generates positive net gains to the society in terms of average earnings and higher intergenerational earnings and schooling mobility.

It seems like I’ve been harping on this issue for the longest time, and this paper brings together a couple of threads of thought on the debates over education and inequality.

One of the lines dividing policy ideas around inequality can be basically summarised as equality of opportunity and equality of outcome. Promoting the former suggests that some level of inequality can and should be tolerated, as it satisfies the need to reward and encourage merit while at the same time addressing social justice. Aiming for the latter means tolerating lower social welfare, through higher inefficiency and less recognition of merit.

But given that humanity is not an abstract, one generation mathematical model, I think this schism is largely a false one – some degree of equality of outcome is required to lead to equality of opportunity, unless you believe in a divine caste system and that people are literally born into their proper station in life i.e. children of poor families deserve their poor status, and their equally poor economic and educational opportunities.

When some segments of the population, i.e. the richer half, can afford to give their kids a head start by putting them through pre-school, equality of opportunity at higher levels of education becomes pretty meaningless. This is especially true taking into consideration all the other things richer parents can afford – extra tuition, greater variety of extra-curriculur activities – as well as the fact that higher income households tend to have less children and invest more in them on a per capita basis. That is, there’s both a qualitative and a quantitative educational advantage to being born in a higher income household. There wouldn’t be a correlation between socio-economic background and university admittance otherwise.

That there are exceptional individuals that overcome such disadvantages is indisputable, but we laud them not because they represent the norm but because they represent the exceptions.

So while absolute equality of outcome is a non-starter (does anybody believe in communism anymore?), true equality of opportunity – true meritocracy in fact – means a heck of a lot more than just dropping quotas on university entrance exams.

We need to take seriously the public provision of a universal pre-school system, with a standard curriculum and a consistent level of teaching resources. Outside the critical role of parents, that’s where it all begins.

Technical Notes

James J. Heckman, Lakshmi K. Raut, "Intergenerational Long Term Effects of Preschool - Structural Estimates from a Discrete Dynamic Programming Model", NBER Working Paper No. 19077, May 2013