Early Childhood Opinion

Want to Beat the Stock Market? Bet on Early-Childhood Education

By Arthur J. Reynolds — September 19, 2017 4 min read
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Over the past half-century, one of the best financial investments has been in the Dodge & Cox Stock Fund. This mutual fund has achieved an inflation-adjusted average annual return of 8 percent since its founding in 1965—it’s in the top 1 percent of investment funds tracked over that period.

What if I told you that a public investment in young children beginning at age 3 had an average annual return that was more than double the D&C Fund? Sounds far-fetched, but it’s true. In 1967, around the same time the D&C Fund began, the Chicago school district opened four Child-Parent Education Centers in high-poverty neighborhoods. The proven financial success of this program should serve as powerful inducement for districts across the country to make a similar investment in the future of their youngest residents.


After five decades and more than 250,000 families served, the CPC program is arguably one of the nation’s most effective social programs. Now in its third generation as a P-3 school-reform model, the program and its unique success provide an approach and set of action steps to innovate in education to produce even better investment returns. Collaborative leadership, engaged learning, small classes, and comprehensive family and instructional supports are core elements.

In fact, CPC has one of the highest economic returns of any public or private financial investment. Cost-benefit analyses have shown that for every dollar invested, more than $10 is returned in cost savings in the areas of remedial education and criminal justice, coupled with an increase in economic well-being and tax revenues. That is an inflation-adjusted annual return of 18 percent over a child’s lifetime, a cumulative return of 900 percent. In the 2013 State of the Union Address, President Barack Obama even cited the research into CPC’s return on investment as a major basis of his Preschool for All initiative.

CPC began as a preschool program at the start of the nation’s War on Poverty. Given high levels of community distrust of schools and associated underachievement, Chicago’s West Side schools needed innovative solutions. Then-schools Superintendent Lorraine Sullivan worked with the community to open four early-learning centers for 3- and 4-year-olds in the city’s highest-poverty areas. The centers soon expanded to offer services to children up to the 3rd grade.

After five decades and more than 250,000 families served, the CPC program is arguably one of the nation's most effective social programs."

The strong success of the program’s first generation of schools was evident early on. Graduates performed on average six months ahead of their nonprogram peers in school-readiness skills. This success has been reproduced in the current program expansion. That and other impacts—such as higher rates of high school diploma attainment and college graduation, lower rates of crime and health-compromising behaviors, and greater economic well-being—have been sustained for decades.

In addition to being the first preschool program funded by the Elementary and Secondary Education Act’s Title I for disadvantaged students, CPC was also among the first to provide integrated and co-located services from preschool to 3rd grade. In the historically fragmented world of early-childhood education, the program has succeeded in maintaining strong learning environments that improve well-being in all dimensions: academic, social-emotional, health, and family behavior.

To date, the program has expanded beyond Chicago to the states of Illinois, Minnesota, and Wisconsin, and it’s on a growth trajectory. In Chicago, the number of CPC schools has ballooned to 19 since 2012; preschool enrollment has more than doubled, and total program enrollment this year through 3rd grade is nearly 10,000. An early-childhood-education initiative launched by Chicago’s Mayor Rahm Emanuel in 2013, which was based on the return-on-investment research, has helped strengthen the program. Scaling further is now a major goal.

This evidence-based, integrative approach is key to reducing the nearly 50 percent of children who are estimated to enter kindergarten not fully prepared to succeed. The discontinuity between preschool and school-age environments also lowers achievement excellence. It is, for example, jarring when children in preschool classes of 17 (the maximum allowed class size at CPC) graduate to kindergarten classes of more than 30 (the Chicago public school average). Although good preschool programs can substantially improve school readiness, they are not enough to raise 3rd and 4th grade reading and math proficiency to the needed levels.

CPC is a blueprint for addressing those problems. Although the operational elements that produce sustained gains and high returns are well-documented, the essential feature is creating a purposeful and nurturing environment for all learners.

Return on investment is an increasingly important priority in social programs and evidence-based policy. The business- and financial-services industry is founded on that principle. Education programs like CPC have proved that they can exceed even the best of investments in the stock market over the long term. It is time to take the next step and fully scale these programs so that all young people can benefit.

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A version of this article appeared in the September 20, 2017 edition of Education Week as When Early-Ed. Investments Pay Off


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