Actuarial Implications from Pre-kindergarten Education

Abstract

Great progress has been made in providing pre-kindergarten (pre-K) public education throughout the United States. The percentages of 3- and 4-year-olds enrolled nationally have grown from 3% to 5% and 14% to 29%, respectively, between 2002 and 2015. By 2015, 42 states and the District of Columbia were in varying stages of offering pre-K programs (0.9% to 74.2% for totals of 3- and 4-year-olds); eight states were in stages of implementation. We will provide approximate answers to four questions. The first two are how does pre-K education affect female and male life expectancies? The other two are how does pre-K education affect expected years of life dependency in health and in lifetime earnings? The methodology used to help answer these questions consisted of using actuarial/demographic tables over the years 1990 to 2040. It will be shown that upper limits to estimated increases in male and female life expectancy that can be attributed to pre-K education are 2.47 and 1.67 years, respectively. Moderate estimates to the decreases in expected years of health dependency for 65-year old males and females that benefit from pre-K education are 1.47 and 4.71 years, respectively. We will document that people with pre-K education will have higher high school graduation rates, lower crime rates, higher employment rates, and higher wages than those without pre-K education; these four improved rates will lead to improved life expectancies and diminished years of health dependency. These results have actuarial implications for life insurance, long-term health insurance, and pension premium calculations.