Some policymakers worry about the upfront cost of early childhood education. However, studies show that early childhood education is one of the best investments we can make—and that includes investments in the financial market. The estimated return on investment for high quality early childhood education is ten percent. In comparison, the average return on investment in the stock market is 7.2 percent.
Why does early childhood education pay off so well? Children who participate need fewer services over the course of their lifetime. The benefits show up almost right away, with reduced need for special education and grade retention, which costs taxpayers an estimated $7,500 per child. Over time, we reap benefits when these children become adults and need fewer public benefits and are less likely to be incarcerated.