Field Notes: The Promise of Investing in Early Childhood

An Economic Policy Institute report makes the case that investing in America's children would not only usher immeasurable benefits for families, but also society and the economy as a whole.

To address stalled growth in productivity and rising income inequality in the the wake of the Great Recessionrecent report from the Economic Policy Institute (EPI) calls for an ambitious investment in children based on  evidence that specific policies can have permanent, positive results. The report looks at benefits from four interrelated approaches:

  • Investing directly in early childhood care and education.
  • Providing resources to families with young children.
  • Increasing labor force participation by parents (mostly mothers) of young children.
  • Professionalizing the child care workforce.

These investments, the report cites, would catalyze positive, long-term societal change: 

[P]roductivity would improve with a better-educated and healthier future workforce, inequality would be immediately reduced as resources to provide quality child care are progressively made available to families with children, and the next generation would benefit from a more level playing field that allows for real equality of opportunity

The benefits stemming from greater investments in children are also universal, leading to an increasingly productive workforce that will boost economic growth, provide budgetary savings at the state and federal levels, and lead to reductions in future generations’ involvement with the criminal justice system.

Achievement gaps between low- and high-income children arise early, and are exacerbated by the rise in income inequality, the report states: there has been a rising disparity in the total dollars devoted by lower- and higher-income parents to child care and development, even as low-income parents have invested a greater percentage of their overall income into their children. In other words, the greater efforts of low-income parents are being eclipsed by the macro forces of income inequality. As a result, their children are more likely to fall behind, and stay there, as achievement gaps tend to appear before kindergarten and persist throughout a child's life: 

The authors also argue that the negative outcomes of underfunding child care and education span beyond the children themselves. Parents, especially women, can be edged out of the labor force due to a lack of high-quality, affordable child care. Providing adequate services could introduce up to a $600 billion increase in GDP annually, while "an investment that capped child care expenditures at 10 percent of a family income could increase overall women's labor force participation enough to boost GDP by roughly $250 billion."

Additionally, professionalizing caregivers and teachers would aid a sector that lacks labor standards and protections: 

By providing incentives to boost pay and training for early child care providers, a major investment in America’s children would also lift wages in this key economic sector. Many of these gains would accrue to the workers themselves, but the higher-quality workforce that would result from attracting and retaining more and better job seekers and incentivizing training would also result in higher-quality care. 

This is a similar theory of change as that of Heron investee Paraprofessional Healthcare Institute, which works to improve the quality of care offered by home health workers by improving the quality of the jobs themselves.

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