Common Cents: The Benefits of Expanding Head Start

The release of the findings from the Head Start Impact Study (HSIS) has raised considerable concerns about the efficacy of Head Start, a government-sponsored preschool program. The study detected a minimal impact on several cognitive and non-cognitive measures for children in Head Start. As a result, some conservative organizations, such as The Heritage Foundation, have asked for the program to be eliminated. The HSIS results were surprising, given that previous studies had found some significant impacts for children in the program.

In a new study, Patrick Kline and Christopher Walters hypothesize that this discrepancy is due to the characteristics of the group of children to which students in Head Start are being compared—the control, or the “counterfactual” group.

The HSIS used a control group in which the majority of children attended some substitute program for Head Start, whereas previous studies had primarily compared children in Head Start to children in home care. This difference in control group characteristics changes the program impact that is detected. In a departure from previous Head Start research, Kline and Walters wanted to understand the impact of Head Start specifically on children in home care, who otherwise would not be receiving early education, to determine the fiscal benefits of providing Head Start services.

When restricting the measurement of program impact to a comparison between students in the Head Start program and students in home care, Kline and Walters find that there is a significant positive difference in the short run on test scores. That same impact measurement is statistically insignificant when children transition from home care to substitute programs, indicating Head Start has a greater impact for children who would otherwise not be attending any program. This finding shows that students who are the least likely to enroll in Head Start, based on demographic reasons (e.g. low socioeconomic status, non-English speaking households, or geographic distance from the program) or other unobservable factors, are the students who gain the most from participating in the program.

Based on the individual benefits of the Head Start program detected by Kline and Walters, and the prevalence of children in substitute programs, they also wanted to conduct a cost-benefit analysis to determine whether an expansion of the federal program would be a beneficial investment. The authors define the overall financial benefit of Head Start as the cost of providing Head Start to a child, minus the cost of any public subsidies that would have been provided for that child to attend a substitute program, minus the additional tax revenue generated by the increased earnings that child would have over his or her lifetime as a result of attending Head Start. Here, a negative number means cost savings for the government, or money back as a result of the program.

Based on research by Raj Chetty that connects increases in kindergarten test scores to later-life earnings, Kline and Walters calculate a net gain of $5,513 (for the government) for each new child in Head Start. They also conclude that expansions would likely increase this rate of return because the gains for the children not currently in the program, or in a substitute program, are greater than the average benefit, likely yielding a larger impact on later-life earnings.

Concluding that Head Start has a negligible impact and should be reformed based on the HSIS may be premature and ignores the program’s nuanced impact on the children who need it most. This paper gives us reason to believe that Head Start is, in fact, providing a significant benefit, especially for the most disadvantaged students—who would not otherwise be enrolled in a similar program. The program also passes a cost-benefit analysis, showing that, despite arguments to the contrary, it can actually save the government money and does not create new financial burdens for taxpayers.

Article Source: Kline, Patrick, and Christopher Walters. “Evaluating Public Programs with Close Substitutes: The Case of Head Start,” NBER Working Paper No. 21658, October, 2015.

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