Washington, DC’s PEF is the nation’s first dedicated public funding stream to address pay disparities between CCEE educators and public school teachers. Launched in 2022, the PEF delivered direct payments of $10,000 to $14,000 annually to more than 4,000 educators over its first two years. In FY 2024, the PEF shifted to a facility payroll model designed to align educator pay with a newly established public school-based salary scale. In FY 2023, the PEF also began providing access to subsidized health insurance.

This research brief shares findings from a benefit-cost analysis to determine the economic value of the PEF in FY 2024. Analysis of the program’s economic returns in FY 2023 found that, although the PEF represented a substantial public investment, the total value of its benefits exceeded its costs by a considerable margin, yielding a one-year ROI of 23 percent. This research brief presents updated findings from FY 2024 to determine whether the program, after transitioning to a new payment model, continued to generate positive social economic returns in its third year. 

The findings suggest that the PEF sustained a similarly positive ROI of 21 percent. Although total program costs increased under the facility payment model, primarily due to the size of the educator wage payments as well as increased administrative expenditure, the size and economic value of the program’s benefits also increased. As in FY 2023, these benefits accrued mainly to families, in addition to educators and facilities. Overall, the findings indicate that the PEF continues to generate substantial economic returns and remains a socially efficient investment for Washington, DC.