The Poverty of Preschool Promises: Saving Children and Money with the Early Education Tax Credit

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The political momentum behind state-levelpreschool programs is tremendous, but existingproposals are often flawed and expensive. Preschoolcan provide small but statistically significantshort-term gains for low-income children;however, these gains usually fade quickly in latergrades. There is little evidence to support thebelief that large-scale government preschool programsare effective, by themselves, in improvinglong-term student outcomes. Reform of the existingK–12 system should therefore remain the primaryfocus of those interested in sustainableimprovement in student outcomes.

Given that many states have already institutedpre-K programs, or are committed to doing so,this paper proposes model early education legislationaimed at maximizing their chances for longtermsuccess. The Early Education Tax Creditaims to sustain any potential preschool benefitsand establish a solid academic foundation for latersuccess. The program would improve the qualityand efficiency of preschool options by harnessingmarket forces and would pay for itself by usingsavings generated from the migration of studentsfrom public to private schools in grades K–4.

The Early Education Tax Credit approach isunique in meeting the demands of activists forexpanded access to high-quality preschool, meetingthe needs of children and the preferences oftheir parents, and meeting the goal of increasededucational freedom — all while keeping the budgetaryimpact low or positive.