What Are the Short- and Long-Term Causal Impacts of Universal Preschool?

The study asks whether providing free universal preschool for 3- and 4-year-old children in disadvantaged Arab communities in Israel improves long-term educational and social outcomes. Using administrative data that follow nearly 85,000 children from early childhood through young adulthood, the authors analyze test scores, high school completion, college enrollment, juvenile crime, and early marriage. They find substantial gains: high school graduation rises by 2.8 percentage points, university-qualifying matriculation by 3.3 points, and postsecondary enrollment by 5.3 points. Boys’ juvenile crime falls by 3 points, and early marriage among girls drops by roughly 1.5–2 points. These effects persist across multiple cohorts.

Why This Article Was Selected for The Policy Scientist

This article addresses a policy area with wide relevance: whether universal preschool can shape long-run educational and social outcomes, particularly for disadvantaged populations. That question matters far beyond Israel, given global concerns about skill formation, inequality, and social mobility. The authors use unusually rich administrative data with full population coverage and long follow-up, which strengthens both measurement and internal validity. Their quasi-experimental design produces persuasive causal estimates, and the size and consistency of the effects make the study a meaningful contribution. The findings likely generalize to settings where home-based early childhood environments are similarly constrained, making the article timely as countries debate large-scale preschool expansion.

Full Citation and Link to Article

DeMalach, E., & Schlosser, A. (Forthcoming). Short- and long-term effects of universal preschool: Evidence from the Arab population in Israel. American Economic Journal: Economic Policy. https://www.aeaweb.org/articles?from=f&id=10.1257/pol.20240044 

Central Research Question

The article examines whether the introduction of free, universal preschool for 3- and 4-year-old children in disadvantaged Arab localities in Israel produced measurable and lasting effects on educational attainment, cognitive development, and key social outcomes extending into young adulthood. The authors focus on whether large-scale universal preschool—implemented rapidly and at full population scale—can generate life-cycle gains comparable to or greater than those found in smaller, targeted early-childhood interventions. Their central question is therefore causal and developmental: does broad-based public preschool, introduced in a context where most children previously received only home-based care of uneven quality, improve long-term academic and social trajectories, and along which margins are these effects most pronounced?

Previous Literature

The study builds on several strands of research. The first is the long tradition of early-childhood intervention research demonstrating that enriched preschool programs can produce substantial long-term benefits. Foundational work includes the Perry Preschool Project, Abecedarian Program, and similar targeted initiatives from the 1960s and 1970s. These interventions showed persistent effects on education, labor market outcomes, and social behavior, with randomized designs providing strong causal leverage. However, because they were small, intensive, and targeted to highly disadvantaged children, their generalizability to universal systems remains limited.

A second literature evaluates large-scale preschool expansions in settings such as Norway, Germany, Argentina, and U.S. cities like Boston, Tulsa, and New York. Findings are mixed: some studies identify improvements in early skill acquisition and later educational attainment, while others report modest or heterogeneous effects. These mixed results stem partly from differences in counterfactual care arrangements, baseline enrollment rates, program quality, and the presence or absence of sustained downstream investments within the school system.

A third relevant literature examines linguistic and cultural contexts that shape early skill formation. For Arabic-speaking populations, the gap between home language varieties and Modern Standard Arabic—the language of schooling—creates literacy challenges that universal preschool may help mitigate. Research in psycholinguistics and education emphasizes that exposure to formal language structures during preschool can substantially improve later reading comprehension and vocabulary acquisition.

Finally, the study engages with evaluations of educational reforms in Israel, including remedial education programs and targeted monetary incentives. Compared with these later-stage interventions, early-childhood programs may generate higher long-run returns because they intervene at a formative developmental stage and influence a broader set of cognitive and socioemotional mechanisms.

Data

The authors construct an unusually rich dataset by combining multiple administrative sources provided by the Israeli Ministry of Education and the Central Bureau of Statistics. These datasets offer comprehensive coverage of several full birth cohorts and allow the authors to track each child’s trajectory from preschool eligibility through elementary school, middle school, high school, and postsecondary enrollment. Importantly, the administrative linkage captures outcomes over nearly two decades with no sample attrition.

The educational data include standardized test scores, classroom climate measures, disciplinary records, scores on the psychometric college entrance exam, participation in and success on the matriculation examinations, high school dropout rates, and detailed information on postsecondary enrollment across institution types (universities, academic colleges, and vocational institutions).

The dataset also includes two key social outcomes: juvenile criminal charges (for boys) and early marriage (for girls). These measures allow the authors to explore whether universal preschool influences behavioral and social trajectories that extend beyond academic domains. The authors further include information on maternal labor force participation and income to evaluate whether changes in family economic conditions could mediate or confound the estimated effects.

The unusually comprehensive and longitudinal nature of the data strengthens both internal validity and interpretability. It allows the authors to estimate life-cycle impacts and examine intermediate mechanisms, something rarely possible in universal preschool studies.

Methods

The study exploits a quasi-experimental setting created by Israel’s Compulsory and Free Preschool Law of 1999. Although the law mandated free public preschool for all 3- and 4-year-olds, budget constraints forced the government to implement it gradually. Rollout began in the most socioeconomically disadvantaged localities, roughly 91 percent of which were Arab localities. This produced sharp, plausibly exogenous variation in preschool access across cohorts and localities.

The authors use a difference-in-differences (DID) framework, comparing outcomes for treated cohorts in treated localities to untreated cohorts in untreated Arab localities that did not receive preschool access in the early rollout phase. The identification strategy assumes parallel pre-treatment trends between treatment and comparison localities, an assumption tested through a set of diagnostic checks.

The analysis incorporates school-level and locality-level covariates, clustered standard errors, and multiple robustness checks. These include alternative specifications, placebo tests, and examinations of potential compositional changes. The authors also estimate family fixed-effects models, comparing siblings who were differentially exposed to the reform. This addresses potential unobserved family-level confounders and provides an additional layer of causal validation.

Finally, the authors scale intention-to-treat estimates by the observed increase in preschool enrollment (approximately 60 percentage points) to compute local average treatment effects (LATE). This allows comparison to other preschool interventions worldwide.

Findings/Size Effects

The reform produced large increases in preschool enrollment: attendance at age 4 rose from 23 percent to roughly 90 percent, and at age 3 from 16 percent to 80 percent. These sharp increases supply the first-stage variation necessary for causal inference.

Educational outcomes show substantial improvements. High school graduation increased by 2.8 percentage points (ITT), implying a LATE of about 5 percentage points. Eligibility for a matriculation certificate increased by 3.3 points, and students achieved stronger matriculation portfolios, with more credit units in math, English, and science. Participation in the psychometric college entrance exam increased, and scores rose modestly but consistently across cohorts.

Postsecondary enrollment experienced one of the largest gains: a 5.3-point ITT increase, corresponding to a roughly 9-point LATE (approximately a 27 percent increase relative to baseline). Importantly, the gains extended across institution types, including universities—an outcome that contrasts with some other large-scale preschool interventions where improvements were confined to lower-tier institutions.

Social outcomes also shifted in meaningful ways. Among boys, juvenile crime decreased by roughly 3 percentage points. Among girls, early marriage declined by approximately 1.5–2 points. These changes suggest lasting effects on behavior and social functioning, potentially mediated by improved school climate, stronger early cognitive skills, and greater educational engagement.

Intermediate outcomes support these mechanisms: students reported improved school safety, better relationships with peers and teachers, and fewer classroom disruptions. The authors find no meaningful increase in maternal employment or income, indicating that family economic changes do not explain the results.

Heterogeneity analyses reveal larger academic gains for children from low- and medium-SES families, while postsecondary gains are more evenly distributed.

Conclusion

The study provides compelling evidence that universal preschool can produce lasting improvements in educational attainment, cognitive performance, and social outcomes within a disadvantaged population previously characterized by low preschool enrollment and limited access to early learning environments. By leveraging a large-scale natural experiment, rich longitudinal administrative records, and multiple robustness checks, the authors offer one of the strongest causal evaluations to date of universal preschool in a non-Western context.

The findings also highlight how baseline conditions—particularly the absence of alternative formal care and linguistic gaps between home and school—shape program effectiveness. In settings where home-based care is low-quality or where early exposure to formal language structures is critical, universal preschool may generate substantial returns.

Overall, the study contributes meaningfully to the literature by demonstrating that large-scale early childhood interventions can deliver long-run benefits comparable to or exceeding those found in later educational interventions. It underscores the importance of early human-capital investments and provides a valuable reference point for policymakers considering the expansion of universal preschool programs in diverse cultural and socioeconomic contexts.