Does Universal Preschool Hit the Target? Program Access and Preschool Impacts

Abstract

This paper studies the cost efficacy of universal programs, taking advantage of the rich diversity in rules governing access to state-funded preschool in the U.S. Using age-eligibility rules for identification, I find that attending a state-funded universal preschool generates substantial immediate test score gains, particularly for low-income children. Gains for low-income children from attending targeted (largely means-tested) preschool are significantly smaller. Cross-state differences in alternative care options, demographics, and other program features cannot explain the difference in attendance impacts across program types. Benefit-cost ratios of universal programs are favorable despite their relatively high costs per low-income child.