Research show giving poor families money helps kids more than sending them to preschool

If you want your young kids to become good students, your first inclination might be to send them to preschool.

In reality, you might just need a few extra bucks in your pocket.

According to new research from Russ Whitehurst, senior fellow in economic studies at the Brookings Institution, kids whose families received direct cash transfers performed better on follow-up standardised tests than kids who went to preschool for a year or took part in similar early education programs.

The findings contradict much of the conventional wisdom in education policy that governments should invest directly in early education programs. President Obama, Hillary Clinton, and Bernie Sanders have all extolled the benefits of making universal preschool a top priority.

Whitehurst offers a different institution in need of support: families.

He analysed four major studies on the effects of two initiatives related to education: the Earned Income Tax Credit (EITC), essentially a tax refund that low-income families earn based on how much money they make and how many kids they have, and universal preschool.

Whitehurst found that the EITC gives parents breathing room to create a happier, more stable household. That sense of empowerment appears to be more influential than traditional schooling. When Whitehurst standardised the impact of both programs per dollar spent, he found that kids tended to do much better in their later years — sometimes as soon as third grade, others well into college — when their families received money directly.

“I was surprised,” he tells Business Insider. “I was agnostic going in, but it caught my attention.”

That’s not to say that programs that devote money to preschool or early education, such as Head Start, are misguided. If they help kids, that’s still a win, Whitehurst explains. But skills that prepare children for kindergarten aren’t the only part of their development, he says. “In a family support model, school readiness is one branch on the tree, not the trunk.”

To him, it simply makes more sense to give families without much financial security the money that could help them find it.

“If you’re bringing home $21,000 and the government gives you another $3,000, that can be a big deal,” he says. “It can allow you repair your car when it breaks down and you need it to go to work. It can allow you to make a rent payment that, if you missed it, would mean having to change homes or being homeless.”

That extra $3,000 also translates to taking care of kids. The money could mean the difference between constant stress with little time for family bonding, and more time or resources that parents can devote to activities like reading to their kids or taking them to museums.

Whitehurst says he’s not certain whether it’s more effective for governments to mandate how families use the extra cash (similar to how food stamps work), or let them use it however they like. But he concedes that it might not even make much difference in the long run. The more important thing is that low-income families have money.

“The impact of a few thousand dollars when you’re down struggling at the margin can be much bigger than the difference between going from a comfortable existence to a more cushy existence.”

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