Distributional Effects of Early Childhood Programs and Business Incentives and Their Implications for Policy
Upjohn Institute Staff Working Paper 09-151
Timothy J. Bartik Senior EconomistThe W.E. Upjohn Institute for Employment Researche-mail: bartik “at” upjohn.orgJuly 2009
This paper is a draft of Chapter 8 of a planned book,
Preschool and Jobs: Human Development as Economic Development, and Vice Versa
. This book analyzes early childhood programs’ effects onregional economic development. Four early childhood programs are considered: 1) universally accessiblepreschool for four-year-olds of similar quality to the Chicago Child Parent Center program; 2) theAbecedarian program, which provides disadvantaged children with high-quality child care and preschoolfrom infancy to age five; 3) the Nurse Family Partnership, which provides low-income first-time motherswith nurse home visitors from the prenatal period until the child is age two; and 4) the Parent Child-Homeprogram, which provides home visits and educational toys and books to disadvantaged families when thechild is between the ages of 2 and 3.The book considers the main benefit of state economic development to be the resulting increasein earnings of the original residents who stay in that state. Early childhood programs increase residents’earnings largely by increasing the quantity and quality of local labor supply. These programs will increasethe employability and wages of former child participants in these programs. The book compares theeffects on local earnings of early childhood programs with the effects of business incentives (e.g.,property tax abatements). Business incentives increase local residents’ earnings by increasing the quantityand/or quality of local labor demand.This chapter considers the effects of early childhood programs and business incentives on theincome distribution. A key issue is whether early childhood programs should be targeted on the poor, ormade universally available for free. Relevant considerations in addressing this issue include how benefitsof early childhood programs benefit with family income, and the political feasibility of targeted versusuniversal programs.
JEL Classification Codes
: J13, J24, I21, R23, R31, R30I thank Wei-Jang Huang, Claire Black, and Linda Richer for assistance with this book. I alsothank the Pew Charitable Trusts for financial assistance for some of the research that led to this book. Thefindings and opinions of this book are those of the author, and should not be construed as reflectingofficial views of Pew or the Upjohn Institute.