Quality early care and education programs benefit children, families, and communities. A considerable body of research demonstrates the value of high-quality early care and education to improving the life chances of poor children. In addition to helping individual children succeed in school and in life, these high-quality programs save more than seven dollars for every one dollar invested in downstream costs on welfare, juvenile justice, and special education. According to Nobel laureate economist James Heckman, early education programs are economic development because they produce a return on  public investment greater than is possible through business or sports facilities, which receive federal bond funding.

Recent analyses carried out in multiple states make clear the importance of the early care and education sector to local economies: licensed programs create jobs, contribute tax dollars, and generate expenditures on goods and services. In New York State, for example, licensed early care and education contributes $4.7 billion to the state’s economy and employs 119,000 people. In addition, early care and education supports parents’ ability to work or go to school without worrying about the well-being of their children. The Urban Institute’s 2002 National Survey of America’s Families indicates that 73 percent of children with employed mothers are cared for by someone other than their parents.
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Recognition of these multiple benefits has resulted in the investment of billions of federal dollars in early care and education programs, primarily through three programs under the U.S. Department of Health and Human Services: Head Start, the Child Care and Development Fund (CCDF), and Temporary Assistance to Needy Families (TANF) block grants. In addition, nearly 40 states make investments in programs that provide early education opportunities, such as publicly funded preschool for three- and four-year old children. These investments, often in collaboration with federally funded programs, support the ability of parents to work and improve a family’s overall economic situation.

Yet the supply of suitable spaces to house these programs has not kept pace with the growth of the sector, and the shortage is especially severe in low-income communities—both urban and rural. For example, according to a 2007 report by the Advancement Project, California currently lacks preschool-suitable spaces for approximately 117,000 (21 percent) of its four-year olds, with most of the deficit occurring in low-income communities.

This is an excerpt from The NEXT American Opportunity. The full text can be downloaded as an Adobe PDF Document.