Educational Impact of Early Head Start
Introduction
Early Head Start (EHS) is a federally funded early childhood program in the United States that serves pregnant women and families with children under age 3 from low-income backgrounds. The program provides services including home health visits, nutrition assistance, day care services, parenting classes, and connections to other social programs such as WIC, SNAP, Medicaid, and Head Start. The paper analyzes the long-term educational impacts of EHS using the staggered county-level rollout of programs in the 1990s as a natural experiment. Hess (2025) employs a two-way fixed effect model to compare educational outcomes of children born in counties with EHS programs to those without access to the program. The EHS data comes from the Office of Head Start’s Performance Indicator Reports (PIR) and the child outcome data comes from the CDC and the National Cancer Institute. The demographic data used comes from the Census and ACS.
MVPF = 0.4
Net Cost
The paper calculates net cost for enrolled individuals as the sum of the direct program costs, changes in costs as a result of changes in college enrollment, and changes in income tax revenue.
The direct program cost is $24,257 per household over three years (discounted at 3% annually), based on an average federal budget of $500 million and enrollment of 60,000 households annually during the rollout period.
The analysis includes secondary costs for additional college enrollment: $1,540 total for two years of community college (based on federal spending of $4,550 minus student tuition of $3,780) and savings of $10,478 for university education (average annual Pell grant of $5,000 minus average in-state tuition of $10,239, for two years).
The paper also accounts for increased lifetime tax revenue of $4,103 due to higher earnings from college completion (using an 18.7% tax and transfer rate).
The total net cost to the federal government is $24,257 + $1,540 – $10,478 – $4,103 = $11,216 per affected household.
Willingness to Pay
The paper measures willingness to pay through increased discounted lifetime earnings projected from increased college graduation rates. The intent-to-treat effect shows a 1.2 percentage point (3.2%) increase in college graduation for children in counties with EHS programs. Using American Community Survey data from 2017-2019, the analysis projects lifetime earnings by educational level for ages 18-65, assuming retirement at 65 and applying the difference-in-differences estimators to adjust the weighting between high school and college graduates. The increased lifetime earnings amount to $21,944 per recipient. The paper subtracts direct costs borne by recipients for additional education: $7,560 for two years of community college tuition and $10,478 for university costs (average tuition minus Pell grants for two years). This yields a net willingness to pay of $3,906 per recipient.
MVPF Summary
The MVPF is calculated as the ratio of willingness to pay to net cost, yielding an MVPF of $3,906/$11,216 = 0.348.
References
Hess, Andrew (2025). “Analyzing the Effectiveness of Connected Center-Based Child Care: Evidence from Early Head Start.” Working Paper. https://sites.google.com/view/andrewjhess/research/ehs-working-paper
Policy Features
- Category
- Education
- Sub-Category
- Child Education, Child Health
- Beneficiary Type(s)
- Children and Youth, Children under five
- Country of Implementation
- United States
- Year of Implementation
- 1994
- Empirical Method
- Difference in Differences
- Research Type
- Primary
- Peer Reviewed
- No
- MVPF Publication Link
- sites.google.com/view/andrewjhess/research/ehs-working-paper