Research in Review

Research in Review: the Heckman Equation
The Heckman Equation has been used over the past two decades to show the positive economic impact of investing in early childhood programs. The Heckman Equation states that “investing in the early childhood development of disadvantaged children will produce great returns to individuals and society in better education, health, economic and social outcomes—not only saving taxpayers money but increasing our nation’s economic productivity” (heckmanequation.org; n.d.). Professor James Heckman, a Nobel Memorial Prize winner in economics, has worked on numerous research studies to prove the efficacy of early childhood program investment. Other researchers have also conducted studies based on this idea, to mixed results. This paper will examine a few such studies and the implications for the early childhood field.
According to The Center for High Impact Philanthropy at the University of Pennsylvania, “these studies take often non-economic outcomes, and decide what they are “worth” in dollar terms. That said, some things are hard to put a price on, and there is often disagreement on how best to “monetize” non-economic benefits. For example, what is the “value” of a child’s love of reading (a benefit of some programs)?” (Invest in a strong start for children, 2015). It is difficult to quantify concepts that may seem to be abstract. Who determines the value of early childhood programming in terms of the societal impact? Therein lays the controversy surrounding the theory of the Heckman Equation.
Lynn Karoly (2010) further explores this issue in “Toward Standardization of Benefit-Cost Analysis of Early Childhood Investments” from RAND Labor and Population. Karoly researched the differences in types of early intervention programs and their long-term benefits. As she explains, “programs vary in the extent to which they target the child, the parents, or both as the focus of the intervention. Depending on the nature of the services offered and the starting and ending ages, there is tremendous variation in the intensity of the services offered” (2010). Furthermore, “there is a diversity of outcomes that may be affected by programs and that would need to be valued in economic terms. Many of these outcomes—child development, parenting skills, and so on—may be considered ‘soft,’ in other words, not readily valued in monetary terms” (2010). Karoly posits that there is too much variety in types of programs to assign economic value to the outcomes.
Campbell, et al (2012) also found that “few well-controlled studies exist where children from poverty backgrounds have been provided with early childhood educational programs and subsequently followed up into their adult years (i.e., aged 25–40 years) to learn the extent to which the early programs might be linked to enduring life-enhancing benefits”. This finding indicates that part of the issue in the validity of the Heckman Equation theory is follow-up. How are the young participants in programs such as the Abecedarian Project followed into adulthood, to determine the impact of program participation? Per the work of Campbell and her colleagues, it seems that success in a program is somewhat based on the needs of the child and family, the intensity of the early childhood program, and the type of program/school the child had access to after three years of age. The variables are numerous and difficult to quantify.
Karoly and Campbell, along with researchers including James Heckman, have examined early childhood programs including the Abecedarian Project, the Brookline Early Education Project and the Perry Preschool Project. While each program’s main objective is to provide early care and education, other aspects of the programs vary widely. Variables include geographic location, socioeconomic status of participants, race and country of origin of participants, parental involvement and expectations, and supportive services offered.
Each program also focused on a different outcome. According to Campbell, et al:
The BEEP and CLS found significant effects for total years of education, CLS and Perry Preschool reported higher high school graduation rates, and the Perry Preschool study showed higher rates for obtaining an Associate or college degree. For economic indicators, both the BEEP and Perry Preschool reported positive benefits for income, while the CLS reported both higher incomes and higher SES scores. For social-emotional adjustment, the BEEP and CLS found reduced depression in the high-risk treated group, and CLS and Perry Preschool studies reported reduced rates for criminal activity (2012).
Economist Grover Whitehurst of the Brookings Institute examined the Tennessee Voluntary State Pre-K Program (TVPK), which is a full-day program for 4-year-olds from low income families and other high risk children in that age group. Findings indicate “that the program produces strong effects at the end of the pre-K year favoring children in the pre-K program compared to the control group (e.g., pre-K children compared to controls know more letters of the alphabet), but that the effects switch sign to favor the control group as the children are followed into the early elementary school grades (e.g., control group children compared to pre-K children do better on tests of math skills)” (2017). Again, different outcomes are found for a different type of program.
While each program demonstrates some type of success, the differences in the programs make it difficult to tout long-term success in all aspects of adulthood. This is made especially difficult because, “the evaluation field has not converged on a common set of measures” (Karoly, 2010). This is of concern because a lack of common evaluation procedures makes it difficult for the field to agree on the efficacy of the findings across the board.
Another concern Whitehurst discusses is the external and internal validity of such research (2017). Issues of external validity concern the specificity of the Abecedarian Project and others mentioned above. These are specific social service programs, not child care. According to Whitehurst, “there is nothing now available to parents called childcare or daycare that is even grossly similar to Abecedarian in the program that is delivered, the characteristics and social circumstances of the children and families that are served, the teachers and staff who are employed, the age at which children are initially enrolled (6 weeks), the continuity of enrollment from infancy to 5 years, the delivery of on-site primary health care, program leadership and management, or costs” (2017).
Internal validity “is the degree to which the design and analysis of an evaluation of a program’s impact can support causal conclusions about whether the program worked” (Whitehurst, 2017). In order for a study to be internally valid, random assignment is needed to “ensure that differences between groups of subjects other than their experience of treatment are evened out by the laws of chance” (2017). The participants in programs such as the Abecedarian Project were not randomly assigned to the programs, thereby questioning the internal validity of the studies.
While evidence is there that early childhood programs positively impact participants into adulthood, it is difficult to make that case to legislators based on the evidence of studies such as the ones discussed in this review. Every child deserves positive early childhood experiences, regardless of socioeconomic status, etc. We should advocate for an increase in early childhood funding for all children, though I do believe programs such as Early Head Start should have additional support. In conclusion, while the Heckman Equation is a useful theory to reference it should be used along with other research.