Universal Pre-K as Economic Stimulus: Evidence from Nine States and Large Cities in the U.S.

While Universal Pre-Kindergarten (UPK) is often proposed as an economic stimulus, its market effects remain uncertain. We analyze UPK programs implemented across nine states and cities from 1995 to 2020, leveraging their staggered adoption for identification. UPK increased Pre-K enrollment and led to a 1.2% rise in labor force participation, a 1.5% increase in employment, and a 1.6% growth in hours worked, resulting in higher aggregate earnings. Employment effects were strongest for mothers but extended to other groups, primarily women. Impacts varied, with the largest effects observed in areas with high public Pre-K enrollment. Notably, each dollar spent on UPK generated between 3 to over 20 dollars in aggregate earnings – enough that tax revenues might fully cover costs.