Investing in Early Education is a Boost to California's Economy

Oct 17, 2011

By Emily Firgens

The stagnant economy has led many states to make severe cuts to benefit programs and be more strategic about investing their shrinking resources. These cuts have disproportionately hurt low-income families who often need assistance in making ends meet. One kind of assistance comes in quality child care and early education (ECE), which gives children a good start in life and helps parents find and keep work. Now, there's a new report that adds to the research showing that investing in ECE is good for the economy as well.

The UC Berkeley's Center for Labor Research and Education finds significant short- and long-term benefits of investing in early care and education, which play a crucial role in developing California's economy and infrastructure. Researchers report that the California ECE industry serves more than 850,000 children and families and brings in $5.6 billion ever year. California's ECE industry has a significant impact on parents' purchasing power, economic output, jobs, and tax revenue. Parents who rely on child care and early education services have a purchasing power of $26.4 billion based on annual earnings. Spending on the ECE industry supports close to 200,000 jobs in California-both those directly involved in the industry and jobs in educational supplies, food, health care, and other industries. It also results in more than half a billion dollars in state and local tax revenue.

Investment in ECE has long been shown to provide substantial benefits over years and decades. When children participate in quality child care and early education programs they do better in school and in life. When parents have access to reliable child care they are able to participate in the workforce, increase their productivity, and ultimately help improve businesses' bottom-line. Access to child care also helps reduce worker absenteeism and turnover and is tied to the career availability and earnings of mothers, as well as parents' ability to pursue education. This report adds to a body of research that proves investing in ECE can contribute to growing the economy now and in the future. Policymakers concerned with the present economy should make wise choices and consider the importance of child care and early education investments.

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