Abstract: Federal spending on early childhood education and care exceeds $25 billion annually. President Obama and other proponents of taxpayer-funded universal preschool want to add $10 billion as an incentive for the states to expand their early childhood education and care programs -- with the goal of giving all children access to state-subsidized preschool. Why is this a bad idea? Because the majority of America's young children already attend preschool -- and a new federal program that provides financial incentives for states to expand preschool would become an expensive and unnecessary taxpayer subsidy for middle-class and upper-income children. "Free" preschools would also crowd out private preschool programs, limiting choice and options for parents. Heritage Foundation education policy expert Lindsey Burke explains why more government control and spending will not help America's children.

President Barack Obama wants to dramatically increase federal spending on early childhood education and care, which includes creating incentives for states to implement universal preschool.[1] In 2009, the Administration was well on its way to fulfilling this promise when the President included $5 billion in new subsidies for early childhood education and care in the American Recovery and Reinvestment Act (ARRA). The President's fiscal year (FY) 2011 budget request includes $9.3 billion over 10 years for a new Early Learning Challenge Fund grant program, which has been included in higher education legislation (the Student Aid and Fiscal Responsibility Act -- SAFRA) passed by the House, and currently under consideration in the Senate. The Early Learning Challenge Fund provides grants to states to expand their early education programs. If implemented, this program would greatly increase the federal government's role in preschools around the country.

In addition to SAFRA, several other pending bills would significantly increase the federal government's role in early childhood education. In the House, the Providing Resources Early for Kids Act (PRE-K Act) and the Prepare All Kids Act, would provide federal grants to states to expand state preschool programs.[2] In the Senate, the Ready to Learn Act and the Early Education Act of 2009 would provide matching grants to states to help finance universal preschool. In October 2009, Delegate Eleanor Holmes Norton (D-DC) introduced H.R. 3782, the Universal Prekindergarten and Early Childhood Education Act of 2009, which would provide financialincentives to states to implement universal preschool for all four-year-old children.

The ultimate goal of the myriad early education bills is to guarantee access to publicly subsidized preschool for all families. Universal preschool provides taxpayer-subsidized preschool to all children free of charge regardless of parents' income. Proponents argue that universal preschool is necessary to ensure that all children are able to attend preschool. But statistics show that most American children already have access to preschool: More than 80 percent of four-year-old children are enrolled in a preschool program;[3] enrollment of three-year-olds and four-year-olds has increased fivefold since 1964.[4] Moreover, the federal government already provides preschool subsidies to low-income children through the Head Start program and other initiatives -- turning another benefit for universal preschool into a new subsidy for middle-class and upper-income children.

American children are currently well served by the existing network of early education and care providers. More than three-quarters of children are already enrolled in some form of preschool program. Private providers, who make up a substantial portion of the preschool market, are in danger of being crowded out by a large "free" government program and burdensome regulation and certification requirements.

Demand for a large-scale new government program in early childhood education is not evident. Families seem to prefer caring for their children at home in their early years. Strong majorities of mothers indicate that they prefer to stay home when their children are young (up to age four); 80 percent of mothers who work part-time indicate that is the ideal scenario for them. Of all mothers, only 16 percent with young children prefer full-time work, a figure that declined by half from 1997 to 2007.[5]

Policymakers should resist calls for universal preschool because it would lead to the creation of a large-scale taxpayer-funded program of questionable value, which would ultimately limit choice for families.

Current Spending on Early Childhood Education

Over the past several decades, taxpayer spending on preschool programs has increased substantially. The federal government and the states have created and expanded various programs to provide access to government-subsidized preschool to millions of children.

Federal Subsidies for Preschool. The federal government currently provides significant funding for early childhood education through dozens of programs administered by multiple agencies; funding for these initiatives is set to increase under recent legislation. According to the Government Accountability Office, there are 69 early education and care programs administered by 10 federal agencies for children under the age of five.[6] Total federal spending on early childhood education and care programs reached an estimated $25 billion in 2009.[7]

Head Start is the largest federal early childhood education and care program administered by the federal government. In 2009, Head Start received $9.5 billion in federal appropriations to serve approximately 900,000 low-income children. Since its inception in 1965, Head Start has cost taxpayers more than $167 billion. But despite the significant amount of taxpayer dollars that have been expended on Head Start, a recently released evaluation of the program by the Department of Health and Human Services found zero lasting benefits for children.[8]

Title I of the Elementary and Secondary Education Act provides the second largest share of funding for early education and child care services to young children.[9] Title I, which provides federal funding for low-income school districts, was funded at $24.5 billion in 2009.[10] Approximately 2 percent of Title I funding supports preschool-age children -- approximately $490 million.[11] In addition to Title I, the Child Care Development Fund (CCDF), which received $2 billion through the American Recovery and Reinvestment Act (ARRA) of 2009,[12]appropriated $5 billion to states in 2009 to support the child care needs of low-income families.[13] The Individuals with Disabilities Education Act (IDEA) received $813 million in preschool grants through ARRA in 2009.[14]

State Subsidies for Preschool. Along with these growing federal subsidies, state government spending on preschool has also risen substantially in recent years. Total state spending on early education reached $5.2 billion in 2008, an increase of approximately 23 percent since 2007.[15] Spending per three-year-old and four-year-old child enrolled in the states averaged $4,609 in 2008 when all sources -- such as Temporary Assistance for Needy Families (TANF) and other federal contributions -- are included.[16] Preschool spending varies considerably by state. While 12 states spend no money on early childhood education programs, other states, such as New Jersey, which spent nearly $11,000 per child in 2008, spend heavily on their preschool initiatives.[17]

Proponents of new or expanded preschool programs argue that children's early education needs are currently not being met. However, a look at present preschool enrollment across the country calls into question the need for an increased federal role in early education, and ultimately, the need for universal preschool.

Enrollment in Preschool and Child Care

Do American children need a new federal preschool program? A review of available evidence suggests that a majority of American families already have access to preschool or child care coverage for their children.

Preschool enrollment of three-year-old and four-year-old children rose from 9.5 percent in 1964 to nearly 53 percent in 2008.[18] When looking exclusively at enrollment of four-year-old children, approximately 80 percent were enrolled in some form of preschool in 2008. According to a survey of early education and child care arrangements by the National Center for Education Statistics, in 2006, approximately 58 percent of four-year-olds were enrolled in center-based care (13 percent of whom were enrolled in Head Start), 13 percent had home-based or relative care, 8 percent had non-relative home-based care, and 2 percent had multiple arrangements.[19]

Mothers working full time appear to have adequate options for the early education and care needs of their children. Eighty-nine percent of children of full-time working mothers had regular early education or care arrangements in 2005.[20] Furthermore, more than 72 percent of children from families with incomes below the poverty threshold had regular early education or care arrangements.[21]

Enrollment in Private Programs. While federal and state benefits for preschool are considerable, a majority of American children enrolled in preschool and day care programs are currently served by private providers. The vast majority (80 percent) of four-year-old children enrolled in preschool and day care are served by the private sector,[22] with faith-based providers comprising a substantial share of the preschool market. For preschool enrollment exclusively in center-based care arrangements, an estimated 28 percent takes place in churches, synagogues, or community centers.[23]

Child Care by Relatives. In 2005, more than 11 million children under the age of five had mothers in the workforce. Of these 11 million, 30 percent were cared for by a grandparent while their mothers were at work.[24] The same year, 89 percent of all children under the age of five with working mothers had a regular care arrangement.[25]

Head Start Enrollment. While private programs, faith-based providers, state-funded programs, and at-home care encompass much of the preschool market, the federal Head Start program is available to families who are unable to pay for care themselves, and currently serves nearly 1 million preschool-aged children nationally. The federal Head Start program began as a modest summer program in 1965, with an enrollment of approximately 560,000 students and a federal appropriation that year of $96 million.[26] By 2010, Head Start enrollment exceeded 900,000 children and operated at a cost of $9 billion per year. Since its inception, Head Start has cost taxpayers more than $167 billion.[27]

Unenrolled Children. Increased calls for universal preschool from advocacy groups, Members of Congress, and the President imply that the current network of early education options fails to meet the needs of children. However, with more than 80 percent of four-year-old children enrolled in some form of preschool program, fewer than 10 percent are left unaccounted for in either state-funded or private programs.

Labor force participation rates for married mothers whose youngest child is preschool age show that nearly 40 percent were not working in 2005.[28] While other factors besides maternal preferences could explain this low labor force participation rate, it has persisted since 2000. Moreover, a 2007 study by the Pew Research Center found a significant increase during roughly the same time period in the number of mothers of children four or younger who prefer part-time work or not to work at all. Between 1997 and 2007, the percentage of women of preschool children who prefer reduced work hours rose from 69 percent to 84 percent. The Pew study also indicated that mothers who work full time gave themselves lower marks for their parenting than mothers who stay at home or work only part time. This phenomenon strongly suggests a parental preference for more time with young children, not for additional options for outside care or education.[29]

How Government Preschool Crowds Out Private Providers

Government-funded preschool programswill likely crowd out the existing private preschool market in two substantial ways: by creating a large "free" taxpayer-funded program with which private providers must compete, and by limiting private participation with numerous new rules and regulations. These changes to the American preschool system would increase costs for taxpayers by encouraging more participation in public programs, undermining private providers, and thereby reducing American families' preschool choices.

Distorting the Early Education Market with "Free" Programs. One potential problem created by universal preschool is that the government-funded preschools would undercut the private market by giving families subsidized or "free" (taxpayer-funded) alternatives to what they currently pay for on their own. The more generous a taxpayer-funded preschool program becomes, the more difficult it will be for private preschools to compete. This will likely lead to a substantial crowd-out of private providers -- which was the case with the introduction of highly subsidized child care in Quebec, Canada.

The Quebec Experience. American preschool and child care programs allow for a comparison to the Canadian experience with state-funded day care.Between 1997 and 2000, the Canadian province of Quebec introduced universally subsidized child care available at a rate of $5 per day for parents, regardless of income. Along with the introduction of full-day kindergarten for all five-year-old children in 1997, Quebec passed a provision for $5 per day child care for all four-year-old children. By 2000, that entitlement had extended to all children up to age five.[30] The provision, known as the Quebec Family Policy, is now $7 per day, and is available to children irrespective of the employment status of their parents.

Economists Michael Baker, Jonathan Gruber, and Kevin Milligan suggested the possibility of a crowd-out of private providers resulting from the introduction of the universally subsidized program. While there was an increase of about 14 percent in child-care enrollment, approximately one-third appears to be due to parents moving their child from informal to formal (subsidized) arrangements. Furthermore, many parents who had previously left their children in the care of family members or friends opted for subsidized child care after the policy was implemented. The researchers note, "It is possible that publicly provided childcare 'crowds out' the private provision of care, with no net increase in childcare use or labor supply to the market."[31] The Montreal Gazette picked up on the researchers' findings, writing that the government has "squeezed other suppliers of child-care service out of the market."[32]

Before 1997, child care subsidies in Quebec specifically targeted low-income families. The Quebec Family Policy provided little additional help to low-income families -- they were already being subsidized -- but provided help to middle-income and upper-income families.[33] Approximately 30 percent of children in the government day care program in 2009 came from families earning more than $60,000, and fewer than 10 percent of children came from families earning less than $40,000 annually.[34] Essentially, the policy serves to subsidize middle-income and upper-income families with no new benefit to low-income parents.

When the Quebec Family Policy was implemented it was assumed that much of the cost would be recaptured through an increase in maternal labor supply. But researchers found that "as a result of this large 'crowd-out,' the taxes generated by the new maternal labor supply fall far short of paying for the costs of the increased childcare subsidies."[35] The new tax base generated by mothers entering the workforce -- many of whom had previously stayed at home with their children -- failed to pay for the cost of the program. The findings show that, in absolute terms, "the impact of the program on labor supply is only about half as large as the impact of the program on childcare utilization."[36] One reason for this could be that women are making use of the child care without being in the workforce.[37]

The researchers also found "consistent and robust evidence of negative effects of the policy change on child outcomes, parenting, and parent outcomes." Participating children were found to be more hyperactive and aggressive, while parents reported worsening interactions with their children.[38] In addition to the questionable benefits provided by the Quebec Family Policy program, its costs were also wildly underestimated. Today, the Quebec program costs $2 billion annually -- an 850 percent increase over 1995-1996 spending.[39]

Government-funded universal preschool will put private providers at a disadvantage and will ultimately limit choice for parents. The experience in Quebec with highly subsidized day care suggests that large government subsidies serve to undercut the private sector while limiting parental choice. While competition with "free" government programs could crowd out the private sector, government-funded universal preschool is also likely to limit participation in the early education market by imposing undue regulatory strains on private preschool providers.

Private Hands Tied by Red Tape

The legislative proposals under consideration in Congress would require participating private providers to comply with a number of regulations. In this respect, a new federal program would likely undermine the autonomy of private preschools. Since the subsidized government program would offer families a free alternative to purchasing private preschool for their children, many private providers would have no choice but to participate in the government program or go out of business. But participation will come with significant strings, such as new licensing and teacher certification requirements, aligned curricula, state standards, and potential restrictions on faith-based organizations. The following is an overview of the types of regulations likely to be included in a new federal preschool program.

Licensing and Certification Requirements. A regulatory focus of current legislative proposals in Congress is on increasing licensing and certification requirements for early childhood education providers. The PRE-K Act, for instance, would require preschool instructors to hold a bachelor's degree with certification in early childhood education.[40] About 33 percent of child care workers are self-employed,[41] and may not be traditionally licensed in early childhood education. Such licensing and certification requirements could put an unnecessary strain on participating private early education providers, and the difficulty of returning to school to obtain a bachelor's degree or early childhood certification may be prohibitive for many.

There is also questionable value in requiring such time-consuming and expensive credentialing. Research has shown that teacher certification has little to no impact on student achievement. A 2007 report published in the journal Child Development analyzed seven major studies on the impact of credentialing and educational attainment of preschool teachers on early education quality and the academic development of children.[42] The report, authored by professors from notable universities across the country and researchers from private organizations and government agencies including the U.S. Department of Education and the National Institute of Child Health and Human Development, asked whether children enrolled in preschool learned more from teachers who hold a bachelor's degree or higher.

The researchers also examined whether credentialing was predictive of preschool children's skills, and more specifically, whether teachers with a bachelor's degree improve program quality and children's skills. In general, the researchers found no link between teachers' attainment of a bachelor's degree and the academic achievement of preschool children or classroom quality. In some instances, the research revealed that "more education was associated with less positive outcomes." In fact, one analysis in the study found that there was a negative impact on the Early Childhood Environment Rating Scale (ECERS-R), which examines outcomes, such as teacher interactions with the children, children's language reasoning, and program structure, noting that "Classrooms where the teacher had a bachelor's degree or more were rated lower on the ECERS-R than classrooms where teachers did not have a bachelor's degree."[43]

The researchers found that three of five studies found no association with improved math, pre-reading, or language skills. Finally, only one of the researchers' 23 analyses pertaining to the question of a teacher's major and the impact on a child's academic achievement found a significant effect for any of the measured outcomes. The report concludes that the findings "indicate largely null or contradictory associations, indicating that policies focused solely on increasing teachers' education will not suffice for improving classroom quality or maximizing children's academic gains."[44]

Other researchers have questioned the efficacy of teacher credentialing in general on children's academic achievement. A 2006 report by the Brookings Institution found that "Controlling for baseline characteristics of students and comparing classrooms within schools, there is no statistically significant difference in achievement for students assigned to certified and uncertified teachers."[45] Economist Caroline Hoxby conducted a review of the relevant research on teacher certification and its relationship to student achievement and found that "credentials do not explain teacher effects for the most part."[46] Professor emeritus Sam Peavey of the University of Illinois reports that "after 50 years of research, we have found no significant correlation between the requirements for teacher certification and the quality of student achievement."[47]

Nevertheless, preschool advocates are increasingly supporting the notion that early education teachers should hold bachelor's degrees.[48] Advocates insist that preschool children need credentialed early education teachers in order to have a robust and effective academic experience.[49] Yet, the research shows that credentialing has little to no impact on the academic achievement of three-year-olds and four-year-olds. Requirements for bachelor's degrees and certification in early childhood education favored by Members of Congress and supported by most universal preschool advocates will likely yield no positive benefits for preschool children and will only serve to further crowd out the private preschool market by burdening providers with unnecessary regulations.

Aligned Curricula and State Standards. Several of the major universal preschool bills require aligned curricula and standards. The PRE-K Act requires states to use "research-based curricula that are aligned with State early learning standards."[50] Similarly, the Prepare All Kids Act stipulates that states must "meet the standards of high quality early education,"[51] and the Ready to Learn Act goes even further, stating programs must offer a "developmentally, culturally, and linguistically appropriate curriculum that is aligned with the State early learning standards."[52] Requirements for aligned standards and curricula could, in due course, diminish the freedom that private providers have in directing instruction.

Regulation of Faith-Based and Church Providers. In order to participate in a universal preschool program, faith-based providers would have to comply with new regulations that could undermine their autonomy and ultimately limit families' choices. In Georgia, a state that has had universal preschool since 1993, faith-based providers have had to comply with additional teacher certification and continuous reporting to the state in order to participate in the Georgia subsidized pre-kindergarten program. Although faith-based preschool centers are able to receive religious exemptions from traditional certification through a state agency, they must still be certified by a religious accrediting agency and must report such accreditation to the state every year.

The Georgia Department of Early Care and Learning requires faith-based and church-based providers to be "certified by a state, regional, or national accrediting agency for religious educational instruction...as recognized and approved by the department if such accrediting entity uses standards that are substantially similar to those established by the department."[53] Faith-based providers and church groups must then submit accreditation inspection reports to the department, and the department may rescind accreditation if a center fails to comply with any of the state's regulations. Finally, a faith-based center granted a religious exemption "shall post in a conspicuous place in the facility a copy of the exemption granted by the department and shall notify the parent and guardian of each child under the care of the facility in writing that the center has been granted an exemption from licensure by the department."[54]

With an estimated 28 percent of center-based care taking place in churches and synagogues, universal preschool could crowd out a substantial segment of the private early education market. For participating centers, it is possible that universal preschool regulations could threaten the autonomy of faith-based and church providers, diminish their hiring rights, and restrict religious content.

Crowd-Out: How It Affects Pre-K Options

A reduction in private preschool programs, including faith-based providers and non-profit preschools, will result in diminished parental choice and control in education. Universal preschool -- or, as is the case with many of the current proposals in Congress, federal grants to supplement state-funded preschool -- will limit choice for parents because it will be difficult for private preschools to compete with highly subsidized or free government-supported programs. "The government competes in the private sector the way an alligator competes with a duck,"[55] Representative Mike Pence (R-IN) said in a recent an interview about health care.[56] The same argument applies to the universal preschool debate.

The current diverse delivery system of preschool options is meeting the needs of American families. Some preschools offer specialized child development programs like the Montessori or Waldorf educational approaches, and many others offer a religious environment. A 2001 report on the day care and preschool industry in the United States concluded that, "The business is just too complex and affected by local market conditions to lend itself to a cookie cutter approach."[57]

Little Evidence for the Need for Universal Preschool. The available evidence suggests that a new federal preschool program is unnecessary. More than 80 percent of four-year-olds were enrolled in some form of preschool in 2008, and, according to the most recent Census Bureau figures, 89 percent of children under the age of five with working mothers have a regular care arrangement. The current enrollment figures for young children in early education and child care simply do no support the notion that there is a need to increase access to preschool programs through a universal taxpayer-funded system. Current early education proposals in Congress represent an unnecessary expansion of the federal role in preschool, and will result in further government control over education.

Around 10 percent of three-year-old and four-year-old children are considered seriously at risk for future educational failure, and are primarily defined as children living below 75 percent of the poverty line in single-parent families.[58] Many of these children are currently served through the federal Head Start program and would benefit more from reforms to Head Start, rather than from additional federal funding of preschool. But those calling for an increased federal role in early education seek government-subsidized preschool programs for all children, no matter the parents' income level. University of California at Berkeley professor Bruce Fuller, an advocate for targeted, but not universal , preschool, noted that "for middle-class kids the quality of preschool centers would have to approach a nirvana-like condition to present radically richer environments than the majority of middle-class homes, or home-based caregivers."[59]

Expanding access to preschool would likely create unnecessary subsidies for middle-class and upper-class families, while generating a disincentive for parental care-giving. Providing additional government resources to aid in mothers spending more time in the workforce appears to be at odds with how many families desire to raise their children.

Conclusion

As momentum for universal preschool builds, Congress will consider proposals to increase the federal role in supporting taxpayer-funded preschool programs. However, the majority of American preschoolers are already enrolled in some form of early education program. Additional federal subsidies would produce negative effects, such as crowding out private providers from the preschool market, ultimately limiting choice for parents. Policymakers should recognize that expandingaccess to preschool is unnecessary, provides no new benefits to low-income parents, creates a subsidy for middle-income and upper-income families, and reduces choice for families, while adding to the tax burden for Americans.

Lindsey M. Burke is a Policy Analyst in the Domestic Policy Studies Department at The Heritage Foundation.