Addressing the need for affordable, high-quality early childhood care and education for all in the United States

This essay is part of Vision 2020: Evidence for a stronger economy, a compilation of 21 essays presenting innovative, evidence-based, and concrete ideas to shape the 2020 policy debate. The authors in the new book include preeminent economists, political scientists, and sociologists who use cutting-edge research methods to answer some of the thorniest economic questions facing policymakers today.Ā
To read more about the Vision 2020 book and download the full collection of essays, click here.
Overview
In 2017ā2018, most children in the United States under 6 years of ageā68 percent of those in single-mother households and 57 percent in married-couple householdsālived in homes in which all parents were employed.1 Most of these families require nonparental early care and education, such as childcare centers, preschools, family childcare homes, or informal arrangements with relatives or neighbors, to care for their children while at work. In a typical week in 2011, the most recent year for which complete data are available from the U.S. Census Bureau, 12.5 million of the 20.4 million children under the age of 5 living in the United States (61 percent) attended some type of regular childcare arrangement.2
Unfortunately, on average, the early care and education settings attended by many young children, particularly low-income children or children of color, provide quality at levels too low to adequately promote childrenās learning and development.3 This exacerbates socioeconomic and racial and ethnic inequalities. At the same time, in most regions of the country, families with young children are spending more on childcare than they are on housing, food, or healthcare.4
In this essay, I argue that greater policy attention to early childcare and education is warranted for three reasons:
- High-quality early care and education promotes childrenās development and learning, and narrows socioeconomic and racial/ethnic inequalities.
- Reliable, affordable childcare promotes parental employment and family self-sufficiency.
- Early care and education is a necessary component of the economic infrastructure.
I then provide the research underlying these three statements, and follow with a discussion of several policy solutions to address the current problems of affordability, quality, and supply of early care and education in the United States. The overwhelming evidence shows that more public investment is needed to help ease the cost burden for families and ensure that a trained, stable workforce has adequate compensation. A universal early care and education plan, particularly one with a sliding income scale to provide progressive benefits, may not pay for itself in the short term, but will very likely do so in the long term by boosting broad-based U.S. economic growth and stability while narrowing economic inequality.
High-quality early care and education promotes childrenās development and learning and narrows inequality
Early childhood, especially the first 3 years of life, constitutes a sensitive period of the life course, one during which caregiver warmth, responsiveness, and developmentally appropriate stimulation are vital for development.5 Experiences during early childhoodāwhether positive, such as language exposure, or negative, such as high and chronic levels of stress or deprivationāhave lasting effects.6 Research demonstrates that socioeconomic disparities in cognitive skills and physical development are apparent in infancy.7
Over the past five decades, a wealth of research has examined how early care and education affects childrenās development. Most studies find that the majority of the intensive, high-quality, at-scale model programs promote childrenās academic school readiness in the short term. These include the Abecedarian project (studying a set of children born between 1972 and 1977 into their adult years), the Perry Preschool project (studying of a select group of children born between 1962 and 1967), the Infant Health and Development Program (a 1980s program that studied low birth-weight children in their first 3 years), and longstanding federal at-scale early care and education programs such as Head Start, state pre-Kindergarten programs, and high-quality center-based programs.8 Effects are generally strongest for disadvantaged children, suggesting that early care and education may help to narrow socioeconomic, racial, and ethnic disparities in achievement.9
Among the early care and education programs in existence long enough to have data on long-term effects, research finds substantial and lasting benefits for educational and economic outcomes, including higher rates of high school completion, college attendance, and earnings, and reduced criminal activity and public assistance reliance into adulthood.10 There also is emerging evidence for intergenerational benefits.11 Yet the research is somewhat mixed for the mid-term effects of early care and education programs. Research finds benefits of participation for reduced grade retention, or repeating a grade in school.12 The short-term benefits on test scores, however, appear to āfade outā or converge with children who did not attend early care and education programs as they age.13 But some research suggests that may be due to the quality of the schools attended after early childhood.14
A largely separate body of research examines the health effects of early care and education. Studies find that the initial entrance of young children into group care is associated with a short-term increase in the incidence of communicable diseases.15 But there are substantial and lasting benefits of early care and education participation for health, including increased on-time immunization rates, early screening rates, improved cardiovascular and metabolic health, and reduced smoking.16
Reliable, affordable childcare promotes parental employment and family self-sufficiency
Early care and education provides a context for child development, as well as temporary relief to parents for childcare, allowing them to work. Indeed, increased access to affordable childcare increases parentsā labor force participation, particularly among single mothers. A recent review of the labor effects of childcare estimates that a 10 percent decrease in childcare costs would lead to a 0.25 percent to 1.25 percent increase in parental labor force participation.17 Research finds that public preschool programs, which typically offer part-day, school-year programming, have some but potentially limited effects on parental employment.18 But full-day, full-year early care and educationāparticularly for infants and toddlers for whom care is expensive and hard to find, and who are less likely to attend center-based care (See Figure 1)āwould likely have larger effects on parental labor force participation.19
Figure 1
Early care and education is a necessary economic infrastructure component
Childcare can be considered an infrastructure component akin to transportation. Without reliable, affordable sources, workers cannot regularly get to work or stay there. In the short term, early care and education settings support the productivity of two types of workers: employed parents and childcare workers. Research by University of Chicago economist and Nobel Laureate James Heckman and others suggests that many early childhood programs pay for themselves before children begin kindergarten via increased maternal employment, which generates both household income and tax revenue.20 Further, research from the early 2000s suggests that investments in childcare have strong local economic development effects, or multiplier effects, because much of those dollars are spent on childcare worker wages that they, in turn, spend locally.21
In the long term, early care and education supports the preparedness and skills development of the future workforce of the country. Benefit-cost analyses of several intensive model programs and public early care and education programs indicate that the benefitsāsuch as improved educational, economic, and health outcomes, and reduced criminal activity and receipt of public assistanceāoutweigh the initial program costs, demonstrating positive returns for participants, as well as the public.22
Barriers in accessing the promise of early care and education
Unfortunately, families with young children today face barriers in accessing and paying for the opportunities offered by early care and education. High-quality early care and education is expensive and hard to find, particularly for infants and toddlers.23 Families with young children spend about 10 percent of their incomes on childcare expenses, but families in povertyāfamilies below 100 percent of the Federal Poverty Level of about $12,000 per year for a family of threeāspend 30 percent.24 These expenses represent familiesā actual expenses at a mix of regulated centers and homes and informal lower-cost arrangements with relatives, not necessarily what they may choose to spend if more options were available.
In 2017, infant childcare at centers or licensed homes cost an average of $9,000 to $12,000 per year across the country, more than public college tuition in most states.25 These high childcare costs accrue during a period when parents are at the lowest earning years of their careers and when the financing mechanisms of grants and low-interest loans are unavailable.26 The public programs that exist to help families access early care and educationānamely the Early Head Start/Head Start program and childcare subsidies provided under the federal and state Child Care and Development Block Grant programāserve a small fraction of those eligible. In 2016ā2017, 35 percent of 3- to 5-year-old children in poverty attended Head Start, and 10 percent of children under age 3 in poverty attended Early Head Start.27 In 2015, of the 13.5 million children eligible for childcare subsidies under federal rules, only 15 percent received them.28
Public investments in preschool contribute to dramatic increases in participation in early learning programs in the year or two prior to childrenās entry into kindergarten. Whereas in 1970, about 1.09 million (27 percent) 3- to 5-year old children in the United States attended preschool, by 2016, 4.701 million (60 percent) were enrolled.29 Yet these overall rates mask disparities in attendance. While income-based gaps in enrollment in preschool narrowed in recent decades, children in low-income families continue to be less likely to attend center-based care than their higher-income peers.30 As shown in Figure 1, among children under age 5 with employed mothers, only 28 percent of those in homes under the poverty line attend center-based care, versus 39 percent of those above the poverty line. This is problematic, as center-based settings tend to provide higher-quality, more stable care, on average, than unregulated arrangements.31
Further, centers that low-income children attend provide lower quality care, on average, than those attended by their higher-income peers.32 Research shows that higher-income families are enrolling children in formal early care and education programs at increasingly younger ages.33 In 2005, for example, 22 percent of 1-year-olds from families with incomes above 200 percent of the federal poverty line (at that time, about $32,000 per year for a family of three) attended center-based settings, compared to just 11 percent of 1-year-olds from families with incomes below 200 percent of the federal poverty line.34 Our systemās reliance on private family investment in early childhood is a driver of inequality, putting children on unequal playing fields well before they walk through the doors of their kindergarten classrooms.35
Despite their high expense, early care and education programs should actually cost more, not less. The quality of early care and education depends on the warmth and responsiveness of teachers and caregivers and on the strength and consistency of caregiver-child relationships, which means economies of scale do not apply to childcare in the same way as with other economic sectors. For good reason, state and local regulations set child-adult ratios and group sizes and teacher training requirements. In turn, most childcare costs are directed to labor expenses.36
Yet, despite parents paying as much (or more) than they can afford, childcare workers are paid little. In 2018, the median hourly wage for childcare workers was $11.17 ($23,240 per year).37 This is considerably less than the $16.56 median hourly wage for bus drivers ($34,450 per year).38 Whatās more, there are wide racial and ethnic gaps in teacher pay and benefits such as health insurance coverage or paid sick leave.39 Many workers earn so little that they rely on public assistance. Between 2014 and 2016, more than half (53 percent) of childcare workers lived in families that participated in one or more of four public programs.40 This compares to 21 percent in the general population.41
Low pay and few benefits present barriers in attracting and retaining a skilled early care and education workforce. Teacher educational qualifications and stability are associated with the quality of early childhood settings and, in turn, a wide range of childrenās outcomes.42 In 2012, 25 percent of childcare centers had turnover rates of 20 percent or higher.43 A 2018 study found that 10 percent of children in Head Start (whose teachers average lower pay than those at public preschool programs) had a teacher who left Head Start entirely during the program year, with harmful consequences for childrenās outcomes.44 Adequate caregiver and teacher compensation and training is necessary for supporting quality and stability in, and augmenting the supply of, early care and education.
This lack of reliable, affordable childcare has reverberating effects for parents, employers, and the U.S. economy. Interrupting a career due to a lack of adequate childcareāsomething more often done by mothersāhas both short- and long-term economic ramifications for families in terms of lost wages, retirement savings, and other benefits, with an estimated average reduction of 19 percent in lifetime earnings.45 Even when maintaining labor force participation, working parents and their employers feel the economic consequences of childcare inadequacy. A 2018 survey found that workers with children under the age of 3 lose an average of 2 hours per week of work time due to childcare problems, such as leaving early or arriving late. One-quarter of respondents reported they reduced regular work hours, turned down further education or training, or turned down a job offer due to childcare problems.46 One recent study estimated that the childcare crisis results in $57 billion in lost earnings, productivity, and revenue each year.47
Policy solutions
Most early care and education policies are designed for one or both of two purposes: to provide care while parents work or to promote childrenās readiness to enter kindergarten by supporting cognitive, social-emotional, and behavioral development. This is a false dichotomy. As detailed above, high-quality, affordable, reliable programs accomplish both purposes. Yet there are simply too few high-quality, affordable, reliable programs in the United States today, and most are out of reach for low- and middle-income families.
In order to address familiesā and employersā early care and education needs, policies must address the affordability, quality, and supply problems in our current system. More public investment is needed to help ease the cost burden for families and ensure that a trained, stable workforce has adequate compensation, which will promote affordability and quality. Low-income families disproportionately shoulder the economic and other burdens caused by the lack of childcare, although middle-income families are also economically squeezed during the years in which their children are young.
A universal plan, particularly one with a sliding income scale to provide progressive benefits, may not pay for itself in the short term, but will likely do so in the long term.48 A universal plan that offers benefits such as mixed-income classrooms may have beneficial peer effects.49 And these kinds of plans have fewer administrative barriers and stigma, and a broader base of political support.50 Further, an analysis of the Infant Health and Development Program estimates that socioeconomic achievement gaps would be substantially narrowed from universal programs.51 Policies should be flexible enough to meet familiesā diverse needs, address the overall supply of early care and education, and cope with the gaps that are particularly troublesome for families today, such as care during nonstandard hours and for children with special needs.52
Two examples of universal policy solutions that would improve affordability, quality, and supply are the Child Care for Working Families Act and the Universal Child Care and Early Learning Act. Both of these proposed bills would increase public investment in early care and education to limit familiesā out-of-pocket payments to 7 percent of family income (the threshold recommended by the U.S. Department of Health and Human Services), increase childcare worker compensation and training, and expand public preschool and the supply of childcare for infants and toddlers. The Child Care for Working Families Act does so by expanding childcare subsidies, nearly doubling the number of children eligible.53 The Universal Child Care and Early Learning Act relies more on public provision, expanding a network of early care and education options through federal-state or federal-local partnerships.54
Both bills, if passed by Congress and signed into law, would lead to substantial increases in the availability of high-quality, affordable early care and education programs. An analysis of the Child Care for Working Families Act estimated that, at full implementation, the availability of new childcare subsidies and reduced childcare costs would lead to 1.6 million more parents joining the labor force, the bill would create 700,000 new jobs in the childcare sector, and pay among teachers and caregivers would increase by 26 percent.55
Download FileAddressing the need for affordable, high-quality early childhood care and education for all in the United States
Conclusion
The recent increases in state and local paid family leave programs in a handful of states and cities are laudable and help parents manage their own health and their newbornsā needs, while maintaining their jobs and a basic income.56 Likewise, federal and state public preschool programs and Head Start serve increasing numbers of children, with 44 percent of 4-year-olds and 16 percent of 3-year-olds enrolled in public programs across the country.57 But in the years following the (relatively brief) period of paid leave and preceding the availability of preschool, families require affordable, high-quality, stable early care and education arrangements that match their working hours.
To ignore early care and education policy means to ignore a major expense and pressing concern for families and employers across the nation. Moreover, the research shows that early care and education can promote childrenās cognitive and other outcomes, narrowing disparities and leading to greater economic growth.58 Our nationās current lack of investment in early care and educationāunique among our peer countriesāconstitutes a lost economic opportunity to enhance our global competitiveness, as well as a lost opportunity for narrowing pervasive social and economic inequalities among families today.
āTaryn Morrissey is an associate professor at the School of Public Affairs at American University.
End Notes
1. U.S. Bureau of Labor Statistics, āEmployment Characteristics of Families Summary,ā Economic News Release (2019), available at https://www.bls.gov/news.release/famee.nr0.htm.
2. Lynda Laughlin, āWhoās Minding the Kids? Child Care Arrangementsā (U.S. Census Bureau, 2013), available at https://www.census.gov/prod/2013pubs/p70-135.pdf.
3. S.W. Helburn and C. Howes, āChild Care Cost and Quality,ā The Future of Children / Center for the Future of Children, the David and Lucile Packard Foundation 6 (2) (1996): 62ā82, available at http://www.ncbi.nlm.nih.gov/pubmed/18582984; National Survey of Early Care and Education, āMeasuring Predictors of Quality in Early Care and Education Settings in the National Survey of Early Care and Educationā (2015); A. Chaudry and others, Cradle to Kindergarten: A New Plan to Combat Inequality (New York: Russell Sage Foundation, 2017).
4. Child Care Aware of America, āThe US and the High Cost of Child Careā (2018), available at https://cdn2.hubspot.net/hubfs/3957809/costofcare2018.pdf?__hstc=&__hssc=&hsCtaTracking=b4367fa6-f3b9-4e6c-acf4-b5d01d0dc570%7C94d3f065-e4fc-4250-a163-bafc3defaf20.
5. Board on Children, Youth, and Families and the National Academies of Science, From Neurons to Neighborhoods: The Science of Early Childhood Programs, J.P. Shonkoff and Deborah A. Phillips, eds. (Washington: National Academies Press, 2000); Douglas E. Sperry, Linda L. Sperry, and Peggy J. Miller, āReexamining the Verbal Environments of Children From Different Socioeconomic Backgrounds,ā Child Development 00 (0) (2018): 1ā16, available at https://doi.org/10.1111/cdev.13072; Ruth Feldman and Arthur I. Eidelman, āBiological and Environmental Initial Conditions Shape the Trajectories of Cognitive and Social-Emotional Development across the First Years of Life,ā Developmental Science 12 (1) (2009): 194ā200, available at https://doi.org/10.1111/j.1467-7687.2008.00761.x.
6. Ariel Kalil, āEarly Childhood Development.ā In Delivering Equitable Growth: Strategies for the next Administration (Washington: Washington Center for Equitable Growth, 2016), available at https://equitablegrowth.org/how-economic-inequality-affects-childrens-outcomes/; Jack P. Shonkoff and Andrew S. Garner, āThe Lifelong Effects of Early Childhood Adversity and Toxic Stress,ā Pediatrics 129 (1) (2012): e232ā46, available at https://doi.org/10.1542/peds.2011-2663; Jack P. Shonkoff, āCapitalizing on Advances in Science to Reduce the Health Consequences of Early Childhood Adversity,ā JAMA Pediatrics 170 (10) (2016): 1003ā7, available at https://doi.org/10.1001/jamapediatrics.2016.1559; Greg J. Duncan, Katherine Magnuson, and Elizabeth Votruba-Drzal, āMoving Beyond Correlations in Assessing the Consequences of Poverty,ā Annual Review of Psychology 68 (2017): 413ā34, available at https://doi.org/10.1146/annurev-psych-010416-044224; Greg J. Duncan, Kathleen M. Ziol-Guest, and Ariel Kalil, āEarly-Childhood Poverty and Adult Attainment, Behavior, and Health,ā Child Development 81 (1) (2010): 306ā25, available at https://doi.org/10.1111/j.1467-8624.2009.01396.x.
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9. William T. Gormley, āThe Effects of Oklahomaās Pre-K Program on Hispanic Children,ā Social Science Quarterly 89 (4) (2008); Greg J Duncan and Aaron J. Sojourner, āCan Intensive Early Childhood Intervention Programs Eliminate Income-Based Cognitive and Achievement Gaps?ā Journal of Human Resources 48 (4) (2013): 945ā68; Phillips and others, āPuzzling It out: The Current State of Scientific Knowledge on Pre-Kindergarten Effectsā; Katherine Magnuson and Greg J. Duncan, āCan Early Childhood Interventions Decrease Inequality of Economic Opportunity?ā RSF: The Russell Sage Foundation Journal of the Social Sciences 2 (2) (2017): 123, available at https://doi.org/10.7758/rsf.2016.2.2.05; Daphna Bassok, āDo Black and Hispanic Children Benefit More from Preschool? Understanding Differences in Preschool Effects across Racial Groups,ā Child Development 81 (6) (2010): 1828ā45, available at https://doi.org/10.1111/j.1467-8624.2010.01513.x; Yoshikawa and others, āInvesting in Our Future: The Evidence Base on Preschool Educationā; Taryn W. Morrissey, Lindsey Hutchison, and Kimberly Burgess, āThe Short- and Long-Term Impacts of Large Public Early Care and Education Programsā (Washington: U.S. Department of Health and Human Services, 2014), available at http://aspe.hhs.gov/hsp/14/longtermimpact/rb_longTermImpact.pdf; Marianne P. Bitler and others, āExperimental Evidence on Distributional Effects of Head Start.ā Working Paper (National Bureau of Economic Research, 2016), available at http://www.nber.org/papers/w20434.pdf.
10. David Deming, āEarly Childhood Intervention and Life-Cycle Skill Development: Evidence from Head Start,ā American Economic Journal: Applied Economics 1 (3) (2009): 111ā34, available at https://doi.org/10.1257/app.1.3.111; Rucker C. Johnson, āThe Health Returns of Education Policies from Preschool to High School and Beyond,ā American Economic Review: Papers and Proceedings 100 (2) (2010): 188ā94; E. I. Knudsen and others, āEconomic, Neurobiological, and Behavioral Perspectives on Building Americaās Future Workforce,ā Proceedings of the National Academy of Sciences 103 (27) (2006): 10155ā62; Flavio Cunha and James J. Heckman, āThe Technology of Skill Formation,ā American Economic Review 97 (2) (2007): 31ā47, available at https://doi.org/10.1257/aer.97.2.31; Jens Ludwig and Deborah A. Phillips, āLong-Term Effects of Head Start on Low-Income Children,ā Annals Of The New York Academy Of Sciences 1136 (1) (2008): 257ā68, available at https://doi.org/10.1196/annals.1425.005; Eliana Garces, Duncan Thomas, and Janet Currie, āLonger-Term Effects of Head Start,ā American Economic Review 92 (4) (2002): 999ā1012, available at https://search.proquest.com/openview/466c6163e16cd99af4b4a38f4e0442e3/1.pdf?pq-origsite=gscholar&cbl=42182.
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12. Dana Charles Mccoy and others, āImpacts of Early Childhood Education on Medium- and Long-Term Educational Outcomes,ā Educational Researcher 46 (8) (2017), available at https://doi.org/10.3102/0013189X17737739; Mariana Zerpa, āShort and Medium Run Impacts of Preschool Education: Evidence from State Pre-K Programsā (Washington: Washington Center for Equitable Growth, 2018).
13. Yoshikawa and others, āInvesting in Our Future: The Evidence Base on Preschool Educationā; Arya Ansari, āThe Persistence of Preschool Effects From Early Childhood,ā Journal of Educational Psychology 110 (7) (2018): 952ā73; Greg J. Duncan and Katherine Magnuson, āInvesting in Preschool Programs,ā Journal of Economic Perspectives 27 (2) (2013): 109ā32, available at https://doi.org/10.1257/jep.27.2.109.
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