We study the effect of pre-primary education on children's subsequent school outcomes by exploiting a unique feature of the Uruguayan household survey (ECH) that collects retrospective information on preschool attendance in the context of a rapid expansion in the supply of pre-primary places. Using a within household estimator, we find small gains from preschool attendance at early ages that get magnified as children grow up. By age 15, treated children have accumulated 0.8 extra years of education and are 27 percentage points more likely to be in school compared to their untreated siblings. Instrumental variables estimates that attempt to control for non random selection of siblings into preschool lead to similar results. Pre-primary education appears as a successful and cost-effective policy to prevent early grade failure and its long lasting consequences in low income countries.
Journal of Public Economics (2008) 92 (5-6) 1416-1440 [doi: 10.1016/j.jpubeco.2007.10.007]