How States Would Benefit if Congress Truly Invested in Child Care and Pre-K

May 05, 2022

By Julie Kashen Julie Yixia Cai Hayley Brown Shawn Fremstad

The child care and pre-kindergarten policies under consideration in Congress would not only benefit children, families, early educators, and the child care sector. They will also stimulate billions of dollars in economic activity in every state.

What You Should Know:

State economic growth is hindered by the lack of child care and early learning systems.
Federal legislation establishing a comprehensive child care and universal pre-kindergarten (UPK) system would stimulate economic growth in every state by supporting the healthy growth of the early learning sector; increasing parental employment and earnings; creating and supporting jobs; and minimizing care-related business disruptions.
This economic analysis provides national and state-level estimates of growth from three main perspectives: parents with young children, businesses employing parents of young children, and businesses providing child care services.
At the national level, the child care and early learning proposals under consideration in Congress would generate approximately $48 billion annually in increased parental earnings, $60 billion in reduced business disruptions (including how these disruptions reduce state revenues), and over $30 billion from job creation related to expansion of the child care industry itself.
The first two estimates overlap to some extent, so these three estimates should not be added up to produce an aggregate estimate. At the same time, these estimates do not include all of the economic benefits of comprehensive child care and UPK.
There is little question that the overall gains to states, businesses, and families of young children would be very large. Failure to pass the child care and early learning policies will reduce economic growth in both the short and long term.
This report was written in collaboration with The Century Foundation.

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This post was previously published on cepr.net and under a Creative Commons license CC BY-ND 4.

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