How Investing In Preschool Beats The Stock Market, Hands Down


“If you got 13 percent back on your investments every year, you’d be pretty happy, right? Remember, the S&P 500, historically, has averaged about 7 percent when adjusted for inflation.”

“What if the investment is in children, and the return on investment not only makes economic sense but results in richer, fuller, healthier lives for the entire family?”

That’s how a recent article by NPR starts out as it detailed a new paper co-authored by Nobel laureate James Heckman, a professor of economics at the University of Chicago and the director of the Center for the Economics of Human Development. The paper, titled “The Life-Cycle Benefits of an Influential Early Childhood Program,” adds to a growing body of research on the value and importance of high-quality early education programs by examining their impact over time.

“The main benefit of this study is, if you count all of the benefits that accrue from this program in terms of reduced health care costs, reduced crime, greater earnings, more education, higher IQ — the list is quite long,” Heckman says in the interview. “Those all are monetized. We can compute a rate of return, the dividend would be from the investment. You get about 13 percent per annum. Much higher than the annual return on equities in the U.S. stock market post-Second World War through the 2008 meltdown.”

To learn more about the study, read the full Q&A interview with Heckman on NPR.


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