Research suggests that inequalities may be reduced by providing quality care and education to young children—the younger the better, say the leading researchers. Studies have repeatedly shown that low-income children who receive quality childcare starting at a young age score higher on achievement tests, graduate from high school at higher rates, and experience fewer behavioral problems.1 The biggest return on investment in education appears to be at the preschool level. Economist Robert Lynch argues that public investment in early childhood education pays for itself within a couple of decades by boosting lifetime earnings, increasing productivity, and decreasing rates of criminal misconduct.2 Jack Shonkoff, director of the Harvard Center on the Developing Child, puts it more bluntly: “The foundation of all social problems later in life takes place in the early years.”3

National investments in the workforce should begin early in life, for example, child care and preschool.
Early childhood care and education services also make it easier for parents (mainly mothers) to participate in the workforce. In the past 40 years, one of the most profound changes in the U.S. economy has been the enormous influx of women into the workforce. But in some ways, the U.S. economy operates as if this change had never happened—for example, by having no requirement for paid maternity leave. Out-of-date childcare policy is another area that stands out. Among industrialized countries, the United States invests the least in early childhood care and education services—0.5 percent of GDP compared to anywhere between 2 and 6 percent in European countries.4 U.S. child care policies put us decades behind other industrialized countries in supporting our workforce in ways that boost productivity and help workers make ends meet and care for their families.
The lack of adequate public support for childcare places heavy burdens on low- and middle-income families. Of all mothers with children younger than five, 70 percent are working. A smaller percentage—but still the majority—of mothers with a child less than a year old are working.5 In 1973, one minimum wage income was enough to raise a family above the poverty line. Such minimum wage purchasing power is long gone. High costs of living and stagnant wages require low-income families to combine two or more incomes to stay out of poverty. “Even with two people in the workforce, after they pay their basic expenses, today’s two-income family has less cash left over than its one-income parents had a generation ago,” writes Elizabeth Warren, author of The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke.6 Middle-income families find themselves stretched just trying to live in a neighborhood where their children can attend a good school.
President Obama says he is committed to raising the number of children that receive early education. Hardly anyone in Congress has expressed disagreement with the idea that early education is important, but so far progress has been slow. While there is growing public recognition and consensus on the importance of early education, debates continue about how exactly to best ensure that families have access to high-quality early learning opportunities.
For example, although in recent years states have expanded funding for prekindergarten, primarily for four-year-olds and in some cases three-year-olds, many advocates emphasize the need for a comprehensive approach to early childhood that addresses the needs of infants and toddlers too. Discussions continue about how to make childcare affordable for low- and moderate-income families, how to most effectively encourage improvements in early care and education programs, and how to ensure that various resources and programs are coordinated to meet the comprehensive and diverse needs of children and their families.

Female and Child Care Workers by Minimum Wage Categories, 2005
Lack of sufficient resources presents an overarching challenge to the goal of providing access to affordable, high-quality early care and education. What’s needed is a reconceptualization, as Mildred Warner of Cornell says, treating “expenditures on early education as [economic] investments, changing the sign from negative to positive in national fiscal debates.”7
Women make up approximately half the U.S. workforce. In the job sectors discussed earlier in this chapter, women are a smaller percentage of the workers than men. In the early childhood care and education sector, women are the workforce. Women work in farming and construction and assembly line manufacturing, but statistics from the Department of Labor indicate that these sectors remain predominantly male. In fact, women make up only 9 percent of the construction workforce.8 Within the early care and education sector, women make up 94 percent of childcare workers and 98 percent of preschool and kindergarten teachers.9 While it is essential to increase women’s opportunities to participate in higher-paying sectors, it is also essential to improve the compensation in sectors dominated by women.
The early care and education sector is one of the most underappreciated in the U.S. economy. The average annual earnings of early care and education professionals are barely enough to lift a family of four out of poverty. Job turnover is high, a result of the dismal wages and scarce opportunities for advancement. Inevitably this leads to lower quality care and education for children. Improving the quality of early childhood care and education should begin with paying higher wages. This won’t happen by itself; it will take government leadership to help society better grasp the importance of this sector. A number of states have already begun to take steps in this area, offering incentives in the form of scholarships and higher pay for childcare providers to obtain additional education.
| Expected Fiscal Benefits from Expanded Prekindergarten Programs | |||||
| Massachusetts | Wisconsin | Ohio | Louisiana | ||
| Annual cost per child | $6,500 | $6,445 | $5,900 | $7,056 | |
| Target population | 3- and 4-year-olds | 4-year-olds | An additional 40% of 3-year-olds for two years | 4-year-olds | |
| Total additional Pre-k Investment | $578 million | $207 million | $482 million | $120 million | |
| Share of New Prekindergarten Investments Recouped | |||||
| School system cost savings | 36% | 68% | 50% | 77% | |
| Tax revenues | 20% | 23% | 29% | 51% | |
| Criminal justice savings | 50% | 69% | 78% | 85% | |
| Health expenditure savings | 8% | 3% | 0% | 12% | |
| Welfare expenditure savings | 5% | n/a | 5% | ||
| Total benefit | $683 million | $339 million | $782 million | $270 million | |
| Net benefit | $105 million | $132 million | $299 million | $150 million | |
| Benefit/Cost Ratio | 1.18 | 1.64 | 1.62 | 2.25 | |
| Sources: Clive R. Belfield, “The Fiscal Impacts of Universal Pre-K: Case Study Analysis for Three States,” Working Paper No. 6 (Washington, DC: Investin Kids Working Group, March 2005), Table 4, page 19; Clive R. Belfield, An Economic Analysis of Pre-K in Louisiana (Washington, DC: Pre-K Now,June 2005), Chart 2, p. 9; Clive R. Belfield and Dennis K. Winters, The Economic Returns to the Education System from Investments in Four-year-oldKindergarten for Wisconsin (Washington, DC: Pre-K Now, 2005), Table 4.1, p. 14. | |||||
Footnotes
- National Association of Child Care Resource and Referral Agencies. (2006) Breaking the Piggy Bank: Parents and the High Price of Child Care. [back]
- Robert Lynch (2004), Exceptional Returns: Economic, Fiscal and Social Benefits of Investments in Early Childhood Development. [back]
- Clive Cookson (February 16, 2008), “Poverty Mars Formation of Infant Brains,” Financial Times. [back]
- Janet C. Gornick and Marcia Meyers (2003), Families that Work: Policies for Reconciling Parenthood and Employment, Russell Sage Foundation. [back]
- Mildred E. Warner (2009) (Not) Valuing Care: A Review of Recent Popular Economic Reports on Preschool in the US, Feminist Economics 15(2). [back]
- Elizabeth Warren (2004), The Two-Income Trap: Why Middle-Class Mothers and Fathers are Going Broke, Basic Books. [back]
- Mildred E. Warner (2009) (Not) Valuing Care: A Review of Recent Popular Economic Reports on Preschool in the US, Feminist Economics 15(2). [back]
- Linda Hirshman (December 9, 2008), “Where are the New Jobs for Women?” New York Times. [back]
- Ibid. [back]
Issues
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