Of Human Capital
2005 Minnesotan of the Year
(page 2 of 2)
Of particular interest to the authors is a study of 3- and 4-year-olds, beginning in 1962, in Ypsilanti, Michigan. About 60 of the 123 children involved in the study received intensive early education services at Ypsilanti’s Perry Preschool. The remaining kids served as a control group and received no services. Most of their cases were tracked into adulthood. When they reached age 27, all but six of those involved in the study were located and interviewed. More than 65 percent of the early-ed students graduated from high school, compared to 45 percent in the control group. Four times as many program beneficiaries earned at least $2,000 a month. Only 20 percent as many early-ed students had spent time in jail. Three other shorter-term longitudinal studies are also cited in the Rolnick-Grunewald paper, each showing similar results.
Rolnick and Grunewald conclude that quality early learning for impoverished children could result in a 16 percent annual rate of return on initial investments. Twelve percent of that is purely public return, the economists argue—savings resulting from the reduced costs of educating ready-to-learn children, and the attendant reduction in crime. The other 4 percent, they argue, is private—the increase on a year-to-year basis of the child’s lifetime income.
The essay recommends the creation of a $1.5 billion state endowment to permanently fund high-quality early learning for all 3- to 4-year-old kids from low-income households in the state. A 6 to 7 percent return on investment in AAA bonds, Rolnick argues, would yield about $90 million a year, plenty to pay for the program statewide. (Incidentally, Minnesota now spends about 40 percent of its budget on K–12 education, but less than 1 percent on preschoolers.)
Rolnick was unprepared for the massive response. “I wrote the paper, and I thought I was done,” he says. Hardly, says Todd Otis, president of St. Paul–based Ready 4 K. “He did the research and became almost a rock star of early childhood,” Otis says. “It’s been a real shot in the arm for the early childhood movement.”
Since 2003, Rolnick has gotten little rest. He tours the country like a presidential candidate, delivering speeches. On October 27, 2005, alone, he gave two, one in Alexandria, another in Elbow Lake. He was a keynote speaker for the National Governors Association’s conference in December 2003, alongside Florida governor Jeb Bush, and later addressed Beltway policy wonks at a national Pew Foundation economic-development conference in Washington, D.C. He has addressed the National Council of State Legislatures, sharing a podium with the head of the Bill and Melinda Gates Foundation. Most recently, he spoke at the World Bank, addressing 200 people representing 42 developing countries. Arizona, Tennessee, and Michigan are among states considering like-minded pilot projects. He and Grunewald are in demand. “Every day we get calls for people who want us to speak,” Rolnick says. “This has become a major issue.”
Its import figures to grow. In June 2005, Rolnick and Grunewald wrote a follow-up essay. This time they proposed expanding the scope of childhood development programming to meet the needs of all impoverished kids ages 5 and younger, including newborns. Citing advances in brain research that indicate the most critical neurological development occurs between birth and age 3, Rolnick now pitches $10,000 to $15,000 annual per-child “scholarships” (he admits these are really vouchers) for full-day early learning programs, coupled with voluntary parental mentoring from the day a child is born until kindergarten. Public health nurses would fill the mentor’s role.
For Rolnick, the critical new piece is that early learning programs—including federally funded Head Start programs—would have to compete for the influx of new clients. “We’d have to let the providers know they have to be high-quality to get on the list, and we’d define high-quality,” Rolnick says. “Once you’re on the list, you can compete for the scholarships. We’ll pay for performance. There will be bonuses for providers that do well, and we will give out awards and publish best practices and encourage the market to come up with new solutions.”
To those worried the state may not have enough providers, Rolnick falls back on his faith in the marketplace. “I have no doubt the market will respond if they know they’ve got customers empowered with the financial resources for these kinds of services,” he says.
Praise has poured in. In May 2005, the St. Louis Business Journal opined that Rolnick’s message “is one that takes the early childhood conversation out of child-care centers and classrooms and into board rooms, offices, and university halls.” On July 4, 2004, the Star Tribune dubbed Rolnick “the very model of an American patriot.” To MELF’s Benson, his impact is purely a matter of timing. “If he wrote that essay 8 or 10 years ago, it probably would have sat on a shelf,” Benson says. “Writing what he has written, at this point, is hitting a raw nerve at the right time.”
NOT ALL THE NERVES Rolnick is hitting are registering a pleasured response. Rolnick says he has taken heat from both liberals and conservatives. But his critics on the right are significantly more vocal.
Count Karen Effrem among them. She’s a non-practicing pediatrician from Plymouth and a board member of EdWatch, a conservative education-watchdog group. Effrem says there are too many flaws in Rolnick’s plan to count. She dismisses the economist’s claims about brain research advances and return on investment, saying his estimates of increased benefits to society are “all wrong or based on bad data.” She accuses Rolnick and his associates at Ready 4 K of planning, long-term, to impose federal and state education standards on preschools. “And they have been an unmitigated disaster for K–12,” she says.
Once created, Effrem says, Rolnick’s program would inevitably expand beyond poverty to encompass all preschoolers. That, she claims, would result in a kind of state-imposed Brave New World for early learning.
Rolnick denies that, saying the program would be completely voluntary and would closely involve parents at every stage. Further, he argues against including wealthy and middle-class children, with some possible exceptions, because for those groups, the benefits would be negligible. “What are we doing?” he says. “We’re empowering people to be better parents and giving them resources to do things that middle-class parents already do.”
Mitch Pearlstein, founder and president emeritus of Minnesota’s conservative think tank the Center for the American Experiment, is skeptical but provisionally supportive. His “qualifications and cautions” are many, he says, and have to do with research that indicates Head Start and other early education programs have had spotty records over four decades. “Generally, by the time the kid gets to third grade, it’s as if he or she were never in the program,” Pearlstein says. “So the benefits fade pretty quickly.”
Pearlstein also says the sample size of kids measured in the Perry Preschool study is “absurdly low.” Furthermore, the “hands-on, intimate” environment offered by the Perry Preschool would be very difficult to replicate on a large scale. And while the Perry program’s kids did better than the control group, the outcomes were nonetheless fairly disappointing, Pearlstein says. “What,” he asks, “does that say about overly excited expectations for early childhood education going forward?”
Still, Pearlstein is willing to give Rolnick’s ideas a chance, if for no other reason than fatalism. The move toward expanded early childhood education in the United States is “inescapable, unstoppable,” he says, and this plan, at least, is in Rolnick’s capable hands. “Art’s a good free marketer,” Pearlstein says. “I’m just skeptical of what happens when government gets heavily involved. I fear a general drift toward more inflexibility, more bureaucratic control, more union control and so forth. I have my doubts that, over time, the program will develop as good folks like Art may be envisioning it now.”
State senator Steve Kelley, of Hopkins, the chairman of the Senate Education Committee and a candidate for Minnesota governor, is one of the rare Democrats who are openly skeptical about Rolnick’s ideas, less on the merits of the proposal than on the politics. Kelley notes that a linchpin of Rolnick’s plan is redirecting to early learning programs an existing $500 million, century-old, congressional land-grant endowment, created to perpetually fund Minnesota education. Doing that, Rolnick says, would render tax hikes to finance the early-education program unnecessary. The economist would then couple the state’s contribution with equal commitments from the federal government and the private sector, creating a $1.5 billion endowment.
The problem, Kelley says, is that those proceeds already are in use for K–12 education and can’t be removed without replacement funds. “It might be a good idea,” Kelley says. “But to the extent it pulls resources from the general fund, they don’t explain how we’re going to make up the shifts of [land-grant] money to that specific area.”
As usual, Rolnick has an answer. The land-grant endowment currently generates about $30 million in annual interest for K–12 education. The solution, he says, is to divert $30 million from current economic development incentives—money that, you’ll recall, Rolnick thinks is being wasted anyway—to K–12. Problem solved.
Economist Heckman, who also has analyzed the Perry school research, allows that there are some good reasons to be skeptical. But he also insists that change is needed urgently, and no one has a better idea. “I’m not saying it’s perfect, and I see there is a huge need for research,” Heckman says. But American families are in trouble, he says. At the same time that birth rates among the middle-class and wealthy have fallen, they are rising among the poor, especially among disadvantaged, young, single mothers. “That’s why I think these programs have a role to play,” Heckman says. “There are a lot of kids who are not getting the kinds of opportunities that other kids are getting.”
YOU MIGHT ALMOST GET the impression that Rolnick is on a lonely, quixotic quest to give poor kids a break. In fact, he has many allies, some of the closest in the business community, persuaded by his arguments that early investment can help create a quality workforce and a return on investment from an education system that, too often, seems a fiscal black hole.
One key ally is Al Stroucken, CEO of H. B. Fuller Company, who last year was named chairman of MnBEL, and who has pushed for high-quality early learning to help make Minnesota globally competitive. Cargill’s Rob Johnson, who has directed his company to devote more of its philanthropic dollars to disadvantaged children, is on board, too, as are others. Progress is palpable. MnBEL’s 200 executives successfully lobbied for the creation of the MELF pilot program, while another pilot project, the Invest Early initiative in Itasca County, was devised very much along the lines of Rolnick’s proposal, funded by a $1.5 million Blandin Foundation grant.
“I’m very high on Art,” says Chuck Slocum, the founder and president of the Minnetonka-based Williston Group consultancy that organized MnBEL. “He’s committed to his vision, but he has also shown a pragmatic flexibility toward people who are at other places on the learning curve or who have different approaches. He is able to do that.”
Slocum says some of the economist’s ideas germinated in discussions among business executives who realize that without a fundamental change in the structure of education, the state will cease to compete. But it took Rolnick, an economist who speaks their language, to bring it all together, he says.
“The level of understanding and strategic thinking that business brings to this issue, I just don’t think it would have been there, or possible to organize, if Art hadn’t already been there talking about the payback,” Slocum says. “He has pragmatically pulled the pieces together. He has thought it through sufficiently, and he has got an answer.”
“My bottom line is, let’s just try it,” Rolnick says. “There is a high probability that it will be successful.”
