Study: Early Care and Education Industry Strengthens Entire California Economy

More than 850,000 California children and their families are enrolled in early care and education programs in child care centers, preschools or family child care homes. The early care and education industry is not only important to children and their parents, it also strengthens the California economy as a whole. In a new report I co-authored with Jenifer MacGillvary, we discuss the range of economic benefits that the industry brings to California.

Every dollar spent on early care and education yields $2 in economic output for the California economy.  Spending on child care services increases demand at child care suppliers and at the grocery stores, health care centers and other local businesses where child care workers spend their income. The industry also supports 200,000 jobs in California, including direct jobs caring for and educating children as well as jobs at those outlets where child care businesses and workers shop and purchase services.

Access to early care and education enables parents, especially mothers, to go to work. A reliable child care system also increases worker productivity, reduces absenteeism and decreases staff turnover. Similarly, these services also increase parents’ ability to pursue their own education, resulting in a more educated workforce.

Research has shown that high-quality early care and education programs create long-term savings for the public, too. From reducing the need for remedial and special education to reducing incarceration rates and rates of teen pregnancy, early care and education provides invaluable social benefits. Analyses of the costs and benefits of early care and education have found impressive returns on investment to the public, ranging from $2.69 to $7.16 for each public dollar invested.

Early care and education is a critical part of California’s infrastructure. As the state seeks economic development, parents need the infrastructure of reliable, affordable child care in order to productively participate in the workforce, just as they need highways and roads and public transportation. Even during periods of recession and high unemployment, it is important to maintain the early care and education system; if the system atrophies during times of economic contraction, a child care shortage during recovery will impede workforce mobilization and productivity of many parents and hinder new economic growth. Like the public highway system, child care infrastructure cannot be rebuilt overnight when the number of jobs returns to previous levels.

Read the full report.