The Human Capital Case for Child Care and Early Learning

The American people as a collective hold vast potential for success. Individuals have the capacity to amass the skills and knowledge necessary to excel and achieve economic opportunity—otherwise known as human capital. Wide-spread investments in human capital are critical to building and maintaining a successful workforce and a stable national economy.

Nevertheless, many individuals struggle to acquire and fully develop these critical skills due to a lack of supports available to them. Access to high-quality child care and early learning lays the groundwork for human capital attainment on two fronts: it is the foundation on which children shape their educational and social experiences, and it is necessary for many working parents to participate in the workforce.

The Human Capital Challenge

The collective skills, knowledge, and experience of the American people are our country’s most valuable asset. But for many, opportunities to invest in their development are few and far between. This is because America has a human capital problem. People feel burdened by high costs of living, let down by underperforming institutions, and overlooked by partisan policy gaps. Without access to the economic opportunities that human capital growth affords them, many people—especially people with children—struggle to maintain competitiveness in the workforce.

An efficient, accessible child care system has the potential to both support young children in positive development (thus advancing our future workforce) and support the working parents in our current workforce. Parents with young children require support to care for their children while they work, attend university, or participate in career and technical training—core pathways for economic mobility. Yet a BPC-Artemis survey found 50% of nonworking women cite caregiving challenges as the main reason they left the workforce. Young children benefit from quality child care programming that supports the development of skills needed for school and life. Unfortunately, infant and young toddler care costs are becoming increasingly untenable for families, and only an estimated 47% of three- and four-year olds are enrolled in pre-kindergarten.

High-quality Early Learning is the Foundation for Young Children

The first five years of a child’s life set the foundation for future development and learning. Therefore, it is crucial young children have access to an environment that supports early brain development and the development of positive social behavior. High-quality child care and early learning programs provide developmentally appropriate, enriching experiences for young children.

There is considerable research demonstrating the short- and long-term benefits of child care and early learning. When children consistently attend an early learning program prior to entry into the K-12 system, they are more likely to demonstrate higher rates of academic acuity and positive learning behaviors than children who did not attend a program on a regular basis, or at all. This is because children who attend quality child care and early learning programs often participate in activities that aid the development of cognitive skills and boost specific pre-academic skills necessary to drive educational attainment. Early literacy is one such skill commonly addressed through child care programs, with developmentally appropriate activities including book handling, storytelling, and vocabulary development. Early literacy experiences are especially critical to the human capital challenge, as two-thirds of American fourth graders cannot read at a proficient level.

When accessible, quality early learning programs have been proven to provide a positive foundation for a child’s later educational, social, and emotional success. Well-adjusted, educated and skilled individuals are critical to a functioning workforce, and equitable access to child care and early learning programs is a crucial support for the future of the nation’s workforce.

Child Care as a Critical Support for Working Parents

Child care is vital for many working parents. Approximately 71% of all children under age 5 in the US live in a household where all parents work, meaning that some 16.5 million children may need caregiving during both traditional and non-traditional work hours. BPC found that parents weigh several factors in choosing caregiving arrangements, including safety, quality, and affordability. Additionally, some parents prefer informal care or family, friend, and neighbor (FFN) care instead of formal, licensed programs.

Unfortunately, accessing quality, affordable, and preferable child care when needed has become increasingly difficult. In a recent survey on child care costs and parental employment, BPC asked parents making under $50,000 a year how much child care impacted their ability to search for a job or improve education and skills—1 in 3 parents replied a lot. Across 35 states and the District of Columbia, BPC found an estimated child care gap—the number of children with all parents in the workforce without access to formal child care—of approximately 3.4 million children. Even for higher earning families who may have greater disposable income and flexibility in prioritizing choice in care, the average cost of child care per young child is $11,582 annually, an unsustainable cost for many.

Lack of access to child care has detrimental effects on the employment rate of working parents, with many having to postpone education, training, and employment opportunities due to caregiving needs—especially mothers of young children, who are significantly less likely to participate in the labor force. Lower workforce participation, correlated to a lack in access to caregiving support, negatively affects families, communities, and the wider economy. Our nation’s economy relies on a skilled, competitive workforce, and that workforce is heavily comprised of parents who in turn rely on child care to participate.

Looking Forward

The American people depend on our federal, state, and local institutions, as well as private and philanthropic organizations, to provide opportunities for success. America’s human capital is boundless in its potential, but for it to be cultivated we must make strategic commitments to investments that grow the skills, knowledge, and experiences needed for our workforce to thrive in today’s global economy.

This cannot be done without basic supports such as child care and early learning, which builds a foundation for young children and supports parental participation in the workforce. As we continue to assess the gaps in America’s human capital pipeline, child care will play a key part in the bipartisan work to uplift sustained individual, community, and national success.