Years of budget cuts in Sacramento and Washington have left many programs for children and families chronically underfunded and understaffed. But research shows that this approach is shortsighted —in the long run, programs that support children’s healthy development can save far more money than they cost to operate. Examples include:

Early Care and Education

• The Perry Preschool program saved $17 for every $1 invested in quality preschool and weekly home visits for children from low-income families—because, as adults, participants committed fewer crimes and earned more. (High/Scope Educational Research Foundation, 2004)

• Other programs that combine preschool with home visiting (the Abecedarian program and Chicago Child-Parent Centers) save between $4 and $7 for every $1 invested, by reducing costs for foster care, special education, welfare, and crime—and because participants earn more as adults. (NEIER, 2003 and Chicago Longitudinal Study, 2003)

• Providing quality preschool and home visits to all children in low-income families would save the US $61 billion by 2050. (Economic Policy Institute, 2004)

School-Age Children

• Effective after-school programs save between $1.87 to $5.29 for every $1 spent because participants commit fewer crimes.

• Mentoring programs for school-age children save Washington state $5 for every $1 invested because participants are less likely to commit crimes.

• The Seattle Social Development Project—a school-based program that teaches children interpersonal skills—saves Washington state $3 for every $1 in-vested by reducing crime.

(All from the Washington State Institute for Public Policy, 2001)

Health

Health insurance

• A state health insurance plan that provided medical, dental, vision, and mental health care and substance abuse treatment for all Californians would save the state $43 billion by 2015. More people would have access to primary care (rather than relying on expensive emergency room visits) and the state could cut administrative costs and purchase bulk supplies. (Lewin Group, 2005)

Community Health

• California’s community health centers save $2.70 for every $1 invested by reducing hospital visits and referrals for specialty care. (National Association of Community Health Centers, 2003)

• The Yolo Health Alliance—which coordinates comprehensive services for children—saved Yolo county over $1M in its first year by reducing emergency room visits, medical expenses, and patient complaints. (State Early Childhood Comprehensive Systems, 2004)

Asthma

• Improving air quality in California’s South Coast Air Basin saved $245 million, because children with asthma needed less medical care and missed less school. (Hall, Brajer, and Lurmann, 2003)

• A New York program that provides asthma-related home visits and legal help with housing problems reduced asthma-related hospital visits and overnight stays by 75%. Avoiding one overnight visit saved enough money for three more children to participate in the program. (Centers for Disease Control and Prevention, 2005)

Mental health

• Children’s Systems of Care—which coordinate county services for children with severe emotional problems—saved $645 million because fewer children need out-of-home care. (UCSF Child Services Research Group, 2001)

Nutrition and obesity

• Infants and toddlers in families that don’t have enough food are 30 percent more likely to be hospitalized. Avoiding one hospitalization saves enough money to pay for five years of food stamps for that family. (Children’s Sentinel Nutrition Assessment Program, 2004)

• Planet Health—an obesity-prevention program for middle-school children—saves $1.70 for every $1 invested because participants are less likely to have obesity-related medical costs as adults. (Wang, Yang, Lowry, and Wechsler 2003)

Vaccination

• Vaccinating children against measles, mumps, and rubella saves $16 for every $1 invested by reducing costs to treat these illnesses. (Centers for Disease Control, 1992)

Child Welfare

• The Nurse-Family home visiting program for low-income, single mothers saves $4 for every $1 invested by the time the children are teens, by reducing costs due to foster care, crime, and emergency room use. (Robert Wood Johnson Foundation, 2004)

• Child abuse prevention programs in Massachusetts save $2 for every $1 invested by reducing foster care and in-patient medical care costs. (Massachusetts Kids Count, 1997)

Social Services

Welfare

• Infants and toddlers in families that have had their welfare benefits cut are 30 percent more likely to be hospitalized and 50 percent more likely to be in a family without enough food. Avoiding one hospitalization would save $11,300. (Children’s Sentinel Nutrition Assessment Program, 2004)

Substance abuse treatment

• California substance abuse treatment programs save $7 for every $1 invested by reducing crime. (Lewin Group, 1997)

• Substance abuse treatment programs save between $4 and $23 for every $1 invested by reducing costs due to crime, welfare, foster care, and poor health. (Lewin Group, 2002)

• Family drug courts save New York City up to $45,000 per child by reducing child welfare costs—fewer children have to be placed in foster care. (Child Welfare League of America, 2003)

Minimum Wage

• If California raised the minimum wage to $8 an hour, required employers to offer health insurance, and spent more on job training, the state would save nearly $5 billion by reducing the number of working poor families who need public health insurance, tax credits, and subsidized child care. (National Eco-nomic Development and Law Center, 2004)

Extra resources from the Children’s Advocate bulletin (updated 8-07)

Early care and education:

• Enriching Children, Enriching the Nation, from the Economic Policy Institute, finds that California would save $12 dollars for every dollar it invested in a targeted, high quality, publicly funded preschool program -- or $8 dollars for every dollar it invested in a similar universal preschool program. This is because participants would earn more, commit fewer crimes, and not need as many public benefits.

School-age children:

• Returns to the Public from Investing in an Excellent Education, hosted by the Public Education Network, finds that the public would save $2 to $4 for every dollar invested in key high school completion programs for young black males -- because, as adults, they would commit fewer crimes, have lower health costs, and earn more.

• Afterschool Programs: Keeping Kids -- and Communities -- Safe, from the Afterschool Alliance, finds afterschool programs help prevent youth crime.

Health:

• Economic Cost of Domestic Hunger, hosted by the Sodexho Foundation, finds that hunger costs the US $90 billion each year -- but it would only take $10 to $12 billion to end serious hunger with more food stamps and nutrition programs.

• Costs of Care for Medi-Cal Children After a Gap in Coverage, from the California Endowment, studied children who lost Medi-Cal coverage for three months before being able to reenroll. Finds that children's health care costs after they reenrolled were almost twice as much as before the break in coverage.

Child welfare:

• Protecting Kids, Reducing Crime, Saving Money, from Fight Crime: Invest in Kids, finds investment in home visiting programs would help prevent nearly half of child abuse and neglect -- and save millions because participants would need fewer social services and commit fewer crimes.

Poverty:

• The Productivity Argument for Investing in Young Children, by James Heckman and Dimitriy Masterov, argues for more funding for early interventions for disadvantaged children. Benefits include lower crime rates and fewer school dropouts and teenage pregnancies.

• From Poverty to Prosperity, from the Center for American Progress Task Force on Poverty, finds that child poverty costs the US $500 billion each year in lost productivity, crime, and health care costs -- but cutting total poverty in half over 10 years would cost about $90 billion a year. Recommends tax credits; education; help with housing, child care, and building assets; promotion of unions; and raising the minimum wage.

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