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Evaluating Public Programs with Close Substitutes: The Case of Head Start

Patrick Kline, Christopher Walters

NBER Working Paper No. 21658
Issued in October 2015, Revised in March 2016
NBER Program(s):Children, Economics of Education, Labor Studies, Public Economics, Technical Working Papers

This paper empirically evaluates the cost-effectiveness of Head Start, the largest early-childhood education program in the United States. Using data from the Head Start Impact Study (HSIS), we show that Head Start draws roughly a third of its participants from competing preschool programs, many of which receive public funds. Accounting for the public savings associated with reduced enrollment in other subsidized preschools substantially increases estimates of the program's rate of return. To parse Head Start's test score impacts relative to home care and competing preschools, we selection correct test scores in each care environment using excluded interactions between experimental offer status and household characteristics. We find that Head Start's effects are greater for children who would not otherwise attend preschool and for children that are less likely to participate in the program.

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Document Object Identifier (DOI): 10.3386/w21658

Published: Patrick Kline & Christopher R. Walters, 2016. "Evaluating Public Programs with Close Substitutes: The Case of Head Start," The Quarterly Journal of Economics, vol 131(4), pages 1795-1848. citation courtesy of

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