This article evaluates the long-term impacts of the Chicago Child-Parent Centers (CPC), a comprehensive early childhood program launched in the 1960s, on physical and mental health outcomes. This study follows a cohort of 1539 participants born in 1979–1980 and surveyed most recently at age 35–37 by employing a matched study design that included all 989 children who entered CPCs at ages 3 and 4 (1983-1985) and 550 comparison children of the same age from randomly selected schools participating in the usual district early childhood programs in kindergarten. Using propensity score weighting that addresses potential issues with differential attrition and non-random treatment assignment, results reveal that CPC preschool participation is associated with significantly lower rates of adverse health outcomes such as smoking and diabetes. Further, evaluating the economic impacts of the preschool component of the program, the study finds a benefit-cost ratio in the range of 1.35–3.66 (net benefit: $3896) indicating that the health benefits of the program by themselves offset the costs of the program even without considering additional benefits arising from increased educational attainment and reduced involvement in crime reported in earlier cost-benefit analyses. The findings are robust to corrections for multiple hypothesis testing, sensitivity analysis using a range of discount rates, and Monte Carlo analysis to account for uncertainty in outcomes.

Increasing access to effective preschool programs is a high priority at local, state, and federal levels. Recently, two initiatives to expand preschool programming in Illinois and Utah have used funds from private investors to scale up existing programs. Private-sector social impact investors provide funding to nonprofit or public preschool providers to increase the number of children served. If the measured outcomes from preschool participation meet predetermined goals, then the estimated government cost savings arising from these preschool interventions are used to repay the investors. Social impact investing with a “Pay-for-Success” contract can help budget-constrained governments expand proven or promising preventive interventions without the need to increase taxes. Benefit-cost analysis (BCA) plays a crucial role in helping to identify which social, educational, or health interventions are suitable for this type of innovative financing. Benefit-cost analysts are needed to design the structure of the success payments that the government will make to the private investors. This paper describes social impact borrowing as a new method for financing public services, outlines the contribution of BCA, and discusses the innovative use of social impact financing to promote scaling evidence-based Child-Parent Centers and other early childhood programs.