Investing in Kids: Early Childhood Programs and Local Economic Development

Contents

ix Contents Acknowledgments xvii 1 Introduction 1 Clarifying Previous Thinking 3 A Balanced Economic Development Strategy: Both Labor Demand 6 and Labor Supply Policies The Advantages of Thinking and Acting Locally 7 Why Consider Early Childhood Programs and Business 7 Incentives Together? A Road Map for This Book 9 2 The Nature and Importance of Local Economic Development 13 Benefits, and How They Are Affected by Labor Demand and Labor Supply What is Local Economic Development Policy? 15 The Importance of Local Economic Development 16 Economic Development: What Is It Good For? Absolutely Nothing 19 Except Land Values? Hysteresis: An Argument for Why Local Job Growth Development 21 Might Help Workers But Why Are Jobs Said to Offer “Benefits”? Is There “Something 22 Special” about Jobs? But Why Are Local Jobs So Important? After All, I Could Get 27 Those Same Job Opportunities Elsewhere Other Possible Benefits of Local Job Growth 28 Where the Rubber Hits the Road: Empirical Evidence on the 30 Effects of Increases in Local Labor Demand Not Everyone Agrees: The Blanchard-Katz Perspective and Its 33 Policy Implications The Zero-Sum-Game Argument: Why Care about Local Benefits 36 When What Count Are National Benefits? If Growth Provides Benefits, Why Worry about the Details? 38 What Are the Labor Supply Policies That Affect the Quantity or 40 Quality of Labor Supply in a State or Local Area? What Are the Key Issues in How Early Childhood and Other Labor 40 Supply Programs Affect Local Economic Development Benefits? Two Perspectives on the Benefits to Out-Movers 42 How Mobile Is the U.S. Population? 43 x How Will a State or Local Area’s Employers Respond to a Local 45 Increase in Labor Force Participation or Job Skills? What about the Response at the National Level? 48 Conclusion 49 3 Estimated Economic Development Effects of Well-Designed 53 Business Incentive Programs Types of Business Incentives 56 Business Incentive Effects 63 Financing and Design of Incentives 65 Effects of Local Job Growth on Local Workers 68 Response to Possible Objections 70 Conclusion 73 4 The Economic Development Effects of High-Quality Early 77 Childhood Programs Context of These Three Early Childhood Programs 78 Summary of Economic Development Benefits 79 Why You Should Care about 1 Percent Effects on Earnings 89 Program Description 91 Modeling Economic Development Effects, Part 1: Spending 100 Modeling Economic Development Effects, Part 2: State Labor 103 Market Effects of Increased Labor Supply of Parents or Former Child Participants Does This Analysis Treat Early Childhood Programs Fairly 104 Compared to Business Incentives? Conclusion 110 5 Design Matters: What Features of Business Incentive Programs 113 and Early Childhood Programs Affect Their Economic Development Benefits? Business Incentives 113 Early Childhood Programs 129 Conclusion 148 6 Dealing with the Known Unknowns: How Policymakers Should 159 Deal with Dueling Estimates from Researchers Sources of Uncertainty 159 The Best Response to Uncertainty 166 Conclusion 171 xi 7 Bringing the Future into the Present: How Policymakers Should 175 Deal with the Delayed Benefits of Early Childhood Programs Discounting 177 Reducing Short-Run Costs: Postponing Costs through Borrowing 182 Reducing Short-Run Costs: Possible Offsets from Reduced Special 184 Education Costs Reducing Short-Run Government Costs: Financing Pre-K out of 188 the K–12 School Budget Increasing Short-Run Benefits through Capitalization 194 Increasing Short-Term Benefits: Incorporating Parental 202 Employment Programs into Early Childhood Programs Conclusion 209 8 Who Benefits? Distributional Effects of Early Childhood 219 Programs and Business Incentives, and Their Implications for Policy Targeted Pre-K versus Universal Pre-K 220 Business Incentives: Who Benefits 223 Prekindergarten (Pre-K) Education: Speculation about Possible 229 Distributional Benefits Baseline Results for Distributional Effects of Universal Pre-K 230 Adding in Possible Capitalization Effects 234 Alternative Distributional Assumptions 235 Targeted versus Universal Pre-K 240 Targeting within Universalism: Universal Pre-K with Income- 247 Graduated Fees The Abecedarian Program: Distributional Effects of a Large-Scale 252 Targeted Program The Nurse-Family Partnership: Distributional Effects of a Smaller- 256 Scale Antipoverty Program Conclusion 259 9 Locality Matters: How Economic Development Benefits Vary 267 in Diverse Local Economies What This Chapter Is and Isn’t 268 The Mechanisms by Which Locality Matters 269 Empirical Evidence on Variation across States 271 Empirical Evidence on Metropolitan Areas versus States 272 Empirical Evidence on Metropolitan Area Size 276 Empirical Evidence on Metro Area Growth 277 Conclusion 279 xii 10 The National Perspective: How Local...