Here Today, Gone Tomorrow? Toward an Understanding of Fade-out in Early Childhood Education Programs

An unsettling stylized fact is that decorated early childhood education programs improve cognitive skills in the short-term, but lose their efficacy after a few years. We implement a field experiment with two stages of randomization to explore the underpinnings of the fade-out effect. We first randomly assign preschool access to children, and then partner with the local school district to randomly assign the same children to classmates throughout elementary school. Similar to past early childhood programs, this preschool improved skills in the short-term, but on average did not significantly affect elementary school achievement. We find that the fade-out is critically-linked to the share of classroom peers assigned to preschool access. With enough treated peers, the classic fade-out effect is muted. Our results highlight a paradoxical insight: while the fade-out effect has been viewed as a devastating critique of early childhood programs, fade-out may operate as a key rationale for expanding early education. This is because human capital accumulation is inherently a social activity, leading early education programs to deliver larger benefits as program coverage scales up.