A new study has found that universal pre-kindergarten (UPK) access significantly increases parental earnings, with parents of enrolled children earning an average of $5,400 more per year.
The research, based on data from New Haven Public Schools (NHPS), suggests that free, full-day early childhood education allows parents to yield long-term financial benefits.
This piece appeared on NBER, highlighting findings from a working paper by John Eric Humphries, Christopher Neilson, Xiaoyang Ye, and Seth D. Zimmerman.
By analysing two decades of earnings data, the researchers found that the financial gains from UPK extend beyond the early childhood years, reinforcing its value as a public investment.
Parental Earnings Increase by Over 20% With UPK Enrollment
The study reveals that parents of children in UPK earn, on average, $5,461 more annually, representing a 21.7% increase in income during their child’s pre-kindergarten years.
This rise in earnings is closely linked to an increase in working hours, with parents able to work 12.8 additional hours per week once their child is enrolled in a full-day UPK program.
Crucially, these financial benefits persist beyond the pre-kindergarten years. The study found that parents’ earnings remained higher for at least six years after their child’s enrollment.
However, the long-term increase is not primarily driven by extended working hours, as the effect on labor force participation becomes negligible once children move on to primary school.
Instead, researchers suggest that the higher earnings could be attributed to career continuity—parents who benefit from Universal Pre-K are better able to retain jobs, gain experience, and advance in their professions without disruption.
While UPK does not significantly raise the number of children in formal childcare—most families already use some form of early childhood care—the programme extends childcare coverage by 11.3 hours per week. This added support enables parents to transition to more stable or higher-paying employment.
Economic Gains From UPK, but What About Academic Impact?
Despite the financial benefits for parents, the study found little evidence that UPK improves children’s academic performance in the medium term.
Researchers analysed test scores, attendance records, and grade retention rates from kindergarten to eighth grade and found no significant differences between children who attended this public program and those who did not.
However, the study suggests that the economic returns of Universal Pre-K outweigh its costs, making it a high-value public investment. It also estimates that for every $1 of government spending on UPK, families receive $10 in benefits, making it more effective than many labour market policies aimed at increasing earnings.
Given these findings, the expansion of universal pre-kindergarten programmes may not only support early childhood education but also provide substantial financial relief for working parents.
The study’s authors argue that such programmes should be viewed as both an educational and economic policy, with long-term benefits that extend beyond the classroom.
