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Education Reporter

Rand's Preschool Cost Benefits Study 'Blatantly Overstated and Incorrect'

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Two economics professors from San Jose State University analyzed a Rand Corporation preschool cost study and concluded that Rand's claim of benefits amounting to $2.62 for each dollar California taxpayers contributed were based on selective data and unverified assumptions that skewed results. Consequently, Rand "overestimates the upsides and dramatically underestimates the downsides" of universal preschool as well as California's Proposition 82 that supports government-run preschool.

Using Rand data and methodology, the professors said "it is easy to demonstrate that universal preschool generates losses of 25 to 30 cents for every dollar spent."

San Jose State University economics professor Christopher Cardiff and assistant economics professor Edward Stringham coauthored the analysis of the Rand study. Cardiff's and Stringham's findings were published May 2006 in Is Universal Preschool Beneficial? — An Assessment of RAND Corporation's Analysis and Proposals for California by the Reason Foundation.

They point out that Rand's March 2005 The Economics of Investing in Universal Preschool Education in California lacked real evidence to show how "children from middle- and upper-income families would receive long-term gains by transferring from their current home-based situation to a government-run universal preschool program."

Cardiff and Stringham stated: "Despite the seemingly sophisticated 'economic' arguments for universal preschool, close examination shows RAND is not engaging in evenhanded cost-benefit analysis. They choose the rosiest benefit scenarios, rather than the most likely. If more realistic assumptions about the effects of universal preschool are used, the benefits shrink considerably. They also fail to count a great many costs, which if included, substantially impact the results."

In their analysis they "found the Rand study fails to pass even the basic benchmarks of what can be considered a reasonable economic analysis." They further noted, "If the RAND study was submitted in our San Jose State University classrooms, it would get an 'F'. The bottom line is: The RAND study significantly overestimates the benefits of government-provided universal preschool and significantly underestimates the program's costs."

Rand is criticized for assuming that government-run preschools would be the same high caliber as private programs.

The Reason report says two-thirds of California's 4-year-olds and less than one-third of 3-year-olds are in preschool programs and that the state currently spends over $3 billion in state tax dollars annually on preschool for targeted high-risk, low-income families.

Is Universal Preschool Beneficial? may be found online: http://www.reason.org/ps345_universalpreschool.pdf

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