Comprehensive child care and early learning policy benefits everybody. From the benefits to the American economy and businesses, to the ways it improves healthy child development and educational outcomes, to the prospects for greater gender, racial, and economic equity, everyone in the United States has something to gain from a significant investment in these policies.
If implemented, the policies would have a tremendous positive impact on two generations of Americans—ensuring children have access to learning environments to give them a strong start in life, and supporting parents to pursue greater opportunities for themselves and their families.
Today, Congress is considering the President’s Build Back Better plan, which includes the investment needed to begin to build the child care and preschool system the United States has needed for decades. This comprehensive early childhood education infrastructure will ensure that every parent who needs it can choose the child care provider that best meets their family’s needs and ensure at least a living wage for early educators. If implemented, the policies would have a tremendous positive impact on two generations of Americans—ensuring children have access to learning environments to give them a strong start in life, and supporting parents to pursue greater opportunities for themselves and their families.
This is the first of a series of briefs laying out the reasons why the United States must invest in a comprehensive child care and early learning system. This first brief focuses on economic prosperity.
Child Care and Early Learning Boosts Productivity, Revenue, and GDP
Child Care and Early Learning Creates Good Jobs and Workforce Development Opportunities
A comprehensive child care and early learning system is a prerequisite for economic prosperity. A good system will simultaneously create jobs and enable jobs: it supports good jobs for those working in child care, and enables parental participation in work, education, job training, or other related activities. One study showed that a significant investment could add 2.2 million jobs to the economy, increasing GDP by $274 billion.
Two-thirds of children from birth through age 12 have all available parents—either both parents or a solo parent—in the workforce. Their labor force participation is significantly impacted by the presence or absence of affordable, reliable high-quality child care, school, after-school, and summer camp options when and where they need them. And many more parents would join the workforce if good child care options were available. Meanwhile, prior to the pandemic, parents forewent an estimated $30–35 billion in income each year due to the lack of affordable child care options.
Child Care and Early Learning Is Essential to Expanding Women’s Labor Force Participation, Especially after Dramatic Losses during the Pandemic
This is also a significant issue for moms’ labor force participation, which is key to economic prosperity. The majority of mothers work outside the home for pay. In 2020, while many women left the workforce due to pandemic-related caregiving challenges, 72 percent of moms with children under 18 remained in the workforce. Women serve as the sole or primary breadwinner in 41 percent of families, making their labor force participation a non-negotiable. Women of color, and Black women in particular, have historically had much higher levels of labor force participation when compared with white women, but they also experience many more job disruptions due to inadequate child care. According to the Center for American Progress, “Black mothers are by far the most likely to be the primary source of economic support for their families; they are more than twice as likely as white mothers to be their family’s breadwinner.”
Over the past forty years, as more women entered the labor force and brought home larger paychecks, they have driven 91 percent of the income gains experienced by middle-class families. And while women have pieced together child care solutions in often creative ways, and in spite of the lack of a comprehensive system, the pandemic revealed just how precarious the solutions have been. The combination of the lack of child care and school, along with other factors like occupational segregation, which pushes women into sectors hit the hardest by the current economic crisis, wiped out more than thirty years of women’s employment gains in the United States. At the height of the pandemic, The Century Foundation and the Center for American Progress estimated that the United States could lose up to $64.5 billion annually in women’s earnings due to their reduction in work hours and leaving their jobs as a result of the lack of child care. Ready Nation, an organization representing business executives, recently wrote: “Returning women to work is key to our nation’s economic recovery, as female labor force participation contributes $7.6 trillion to the US GDP every year.”
The tie between good child care and early learning options and increases in women’s labor force participation is common sense and has been demonstrated through research. In a Center for American Progress survey, mothers said that if they had access to more affordable and reliable child care, they would increase their earnings and progress in their careers by finding a higher-paying job, applying for a promotion, seeking more hours at work, or finding a job in the first place. In fact, a recent analysis by the National Partnership for Women & Families showed that if labor force participation for American women aged 25 to 54 was on par with those of women in Canada, Germany, and the United Kingdom, 4.85 million more women could be in the workforce, representing an additional $237 billion in wages per year directly for women and families and adding $650 billion per year to the economy overall—2.9 percent of total GDP. Investing in child care and early learning will spur stronger maternal workforce participation, and further spur the economy.
Child Care and Early Learning Minimizes Disruptions to Employers and to Parents’ Careers and Workforce Development, Thereby Maximizing Economic Growth
Economic prosperity also requires that workers are prepared with the education and training they need. For parents participating in education or job training—including the roughly four million college students who are parents of children under 18, 70 percent of whom are mothers—the lack of access to affordable, available, high-quality child care and early learning programs can be a significant barrier. Yet, the Urban Institute found that for young parents in work and school, more time spent in both activities can mean higher earnings in future years. Supporting parents to further their education and professional skills contributes to economic growth.
A robust child care and early learning system supports the ability of parents to go to work with the peace of mind that their children are in safe, healthy, nurturing learning environments, so that they can minimize disruptions to their work day and increase their productivity.
A robust child care and early learning system supports the ability of parents to go to work with the peace of mind that their children are in safe, healthy, nurturing learning environments, so that they can minimize disruptions to their work day and increase their productivity. The failure to invest in such a system has a significant economic cost. A recent study by the Center for Poverty & Social Policy, Columbia Population Research Center, and Robin Hood showed that even pre-pandemic, the New York City economy was losing approximately $1.28 billion each year because of work absences and turnover due to child care issues. Similar studies in a number of other states—Louisiana, Maryland, Georgia, Washington, and Indiana—found that they each lose over $1 billion annually in economic activity due to child care interruptions. What’s more, the U.S. Chamber of Commerce Foundation found that child care issues resulted in anywhere from $479 million to $3.47 billion in estimated annual losses for state economies, again before the pandemic. These losses add up nationally. In 2019, the Council for a Strong America published a study that showed that the United States was losing $57 billion each year in economic productivity and revenue losses due to the lack of a child care system. How can the United States expect to compete in a 24/7 global economy without giving both businesses and the workforce a chance to succeed?
Children Are, in Fact, the Future
High quality child care and early learning matters for children’s well-being today. It also, prepares them to contribute to society to the best of their abilities once they reach adulthood. All settings—child care centers, family child care, preschools, and others—can set up today’s children for success as students, citizens, and members of the future workforce. The earliest years are critical for healthy brain development. According to Harvard University’s Center for the Developing Child, “Healthy development in the early years (particularly birth to three) provides the building blocks for educational achievement, economic productivity, responsible citizenship, lifelong health, strong communities, and successful parenting of the next generation.”
Among children younger than age 5, there is no majority race or ethnicity.
Young children in the United States also represent the country’s most diverse generation yet. Among children younger than age 5, there is no majority race or ethnicity. These children are poised to contribute unique talents, skills, and ideals to the nation’s shared prosperity. Their diversity will create a pipeline of leaders equipped to compete in the global economy.
Economic prosperity is a central and compelling reason that Congress should pursue the unprecedented investment in child care and early learning. The following briefs in this series will discuss the importance of this investment for healthy child development, equity, and family economic security.
For more information about the economic benefits of an investment in care check out these resources:
The author would like to thank Laura Dallas McSorley for her feedback and review. This project was supported by the Perigee Fund.