Investing in early learning supports the economy

The U.S. Congress Joint Economic Committee issued a brief declaring that increasing federal funding for programs like the Child Care and Development Block Grant (CCDBG) and Head Start is critical not only for increasing access to early childhood education (ECE), but to supporting the economy.

The Many Economic Benefits of Investing in Early Childhood Education” noted that such investments not only support parents’ employment, earnings, and retirement savings, but also benefit children in the short- and long-term, and are advantageous for teachers, businesses, and taxpayers, posing high returns on investment.

“The data clearly shows that having access to affordable and reliable early childhood education unlocks benefits for parents, their kids and the economy,” committee Chairman Martin Heinrich said during an April 10 committee hearing.

“Affordable early childhood education makes it easier for parents and caregivers to work, to afford groceries and rent, and to save for retirement. And when parents can keep working without having to worry about providing child care themselves, businesses don’t have to spend time and money hiring and training their replacements,” he continued. “The benefits of accessible and affordable child care pay off long into the future, with higher lifetime earnings and better outcomes for many kids who participated in early childhood education. This, in turn, leads to a stronger workforce, economy, and revenue base at the local, state, and federal levels, all while driving down spending on social services. Unfortunately, right now, this win-win scenario remains out of reach.”

According to the committee’s brief, as of 2018, more than half of people in the U.S. lived in a child care desert — where slots fall alarmingly short of demand — resulting in long waitlists and high prices. Heinrich noted that families are currently spending an average of 10 percent of their income on child care. The U.S. Department of Health and Human Services recommends no more than 7 percent of a household’s income be spent on child care alone.

In total, researchers estimate that inaccessible child care costs anywhere between $8.3 and $78 billion in lost wages every year.

The CCDBG, a part of the Child Care and Development Fund, authorizes federal funding to help subsidize the cost of child care for low-income families, though the brief notes that current funding allows less than 15 percent of eligible families to be served. Head Start provides educational, social-emotional, health and nutritional services to children up to age 5 and their families.

“While investments in the American Rescue Plan helped bring down the cost of care for families and support child care workers, that funding was only temporary,” Heinrich said. “Government funding and support for these programs is essential for our country and economy to reap the maximum benefits of early childhood education.”