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Economic Benefits of Early Care and Learning

By Stephanie Berglund

Like many of us who support early childhood, thread understands that early care and learning is a critical part of Alaska’s infrastructure, supporting families and allowing them the choice of maintaining employment while raising a family.

jim calvin presenting report (2)

Jim Calvin presenting the 2015 Economic Impact of Early Care and Learning Report.

Now, a new report released in October 2015, 2015 Economic Impact of Early Care and Learning Report by the McDowell Group, reveals that the early care and learning sector has an even greater impact on Alaska’s economy than we suspected — to the tune of half a billion dollars.

According to the report, the early care and learning sector accounts for $512 million in economic activity statewide. This economic activity boasts benefits for working families and employers now, and for our state’s young children exponentially for many years to come.

The report, prepared for the Alaska Early Childhood Coordinating Council (AECCC) of which thread is a member, highlights some eye-opening data that exposes the crucial role early care and learning plays in Alaska’s economy. For instance:

  • Nearly one in six workers — or 15 percent of Alaska’s workforce — depend on early care and learning services in order to go to work each day.
  • Wages attributed to these workers are estimated to be over $2 billion.

Many Alaskans are familiar with the need to find affordable and quality child care, yet most are unaware that licensed/regulated care is in short supply. Across the state there are only enough spaces for half of the children who need care. This number is much higher in some communities and, across the state, the demand continues to grow. In a parent survey conducted as part of the report, 46 percent of parents with children under 6 years of age report difficulty finding care.

On top of the shortage in access to quality early care and learning, tuition is expensive for families and they are fronting the majority of the cost. The report finds that families are contributing $223 million, or 65 percent, of all funding spent on early care and education ($343 million) in Alaska.

Early care and learning services are often the family’s highest monthly expense – in some cases even higher than mortgage/rent. While families are paying a premium for early care and learning services, the programs are struggling to pay livable wages for early childhood teachers. Most of the early childhood workforce is employed in state-licensed child care and their annual wages are only 40 percent of the overall statewide average. For example, a child care teacher makes an average annual salary of $20,676 compared to a public sector employee earning $54,528+. Wages in this sector are too low to attract and sustain a high quality workforce. Higher quality early care and learning programs come at a cost, yet we know families are unable to afford more. The report brochure highlights the difference in the cost for higher quality care.

In addition to the economic impact of the early care and learning sector on today’s workforce and economy, the report reviews and highlights the benefits of investing in early care and learning. Not only does the sector play an important role in Alaska’s economy, the report highlights research suggesting that investments in early care and learning boost productivity in the workforce over the next several decades.

Quality early care and learning is a smart long-term investment for government. Research highlighted in the study shows early childhood education can reduce negative and costly outcomes for government and society. This includes savings associated with reduction in crime, delinquency, reliance on welfare, and health care costs coupled with improvement in educational achievement. Investments in early care and learning will have an increased economic impact in Alaska.

thread, Alaska’s Child Care Resource and Referral Network, is committed to strengthening access to affordable and high-quality early care and learning. We invite you to share the 2015 Economic Impact of Early Care and Learning Report with others, talk with your lawmakers about the importance of early care and learning for Alaska, and join Alaska Children’s Trust and other early childhood supporters in strengthening our families and young children.

SB pictureStephanie Berglund is the chief executive officer of thread, Alaska’s Child Care Resource and Referral Network. She oversees statewide network services aimed at advancing early care and learning, specifically to improve the quality, accessibility and affordability of child care in Alaska. Stephanie lives in Anchorage with her husband and 10-year-old daughter. She is deeply committed to improving the quality of life for children and families in Alaska.