Understanding the Fade-out in Early Childhood Education

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. This study involves  implement a field experiment with two stages of randomization to explore the underpinnings of the fade-out effect. The authors 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. 

The authors find that the fade-out effect is critically-linked to the share of classroom peers assigned to preschool access—with enough treated peers the classic fade-out effect is muted. 

The results highlight a paradoxical insight: while the fade-out effect has been viewed as a devastating critique of early childhood programs, the results highlight that fade-out is a key rationale for providing early education to all children. This is because human capital accumulation is inherently a social activity, leading early education programs to deliver their largest benefits at scale when everyone receives such programs.