A Benefit–Cost Analysis of Tulsa Pre-K, Based on Effects on High-School Graduation and College Attendance

Abstract

AbstractThis paper presents new benefit–cost estimates for the Tulsa universal pre-K program. These calculations are based on estimated effects, from two recent papers, of Tulsa pre-K on high-school graduation rates and college attendance rates of students who were in kindergarten in the fall of 2006. In the current paper, educational effects from these prior papers are used to infer lifetime earnings effects. Our conservative estimates suggest that per pre-K participant, the present value of earnings effects in 2021 dollars is $25,533, compared with program costs of $9,628, for a benefit–cost ratio of 2.65. Compared to prior benefit–cost studies of Tulsa pre-K, this benefit–cost ratio is below what was predicted from Tulsa pre-K’s effects on kindergarten test scores, but above what was predicted from Tulsa pre-K’s effects on grade retention by ninth grade. This fading and recovery of predicted pre-K effects as children go through K-12 and then enter adulthood is consistent with prior research. It suggests that pre-K may have important effects on “soft skills,” such as persisting in school, and reminds us that short-term studies of pre-K provide useful information for public policy.