News from the University of California, Berkeley - 08/03/11
Contact: Rebecca Graham, (510) 642-9187, rgraham@berkeley.edu

Berkeley -- A new study from the University of California, Berkeley, Center for Labor Research and Education finds that the $5.6 billion early childcare and education (ECE) industry supports $11.1 billion in economic output in California.

The study, “Economic Impacts of Early Care and Education in California,” by Jenifer MacGillvary and Laurel Lucia, explores the economic effects of the ECE industry in California, which they say benefits the state economy as well as the children who receive care.

MacGillvary and Lucia estimate that spending on ECE supports nearly 200,000 jobs, both direct positions in the early childhood education industry and positions in educational supplies, food, health care, and other industries. State ECE spending results in more than half a billion dollars in state and local tax revenue. Lucia explains, “Every dollar spent on ECE yields $2 in economic output for the California economy, because ECE spending increases demand for suppliers and the businesses where ECE workers and their families shop.”

Access to ECE services allows more parents, especially mothers, to work and increases parents’ ability to pursue their own education, the researchers say. Parents using paid ECE services in California collectively earn approximately $26.4 billion per year, which translates directly to those parents’ purchasing power.

Lucia says, “The child care sector’s economic impact rivals that of many industries that traditionally receive economic development dollars from local and state governments.” Even so, according to the California Budget Project, state funding met only 60 percent of the need in recent years and there were nearly 200,000 children on waiting lists for state subsidies.

Dismantling even part of the existing child care infrastructure will stunt California’s economic recovery. MacGillvary says, “If the system atrophies during times of economic contraction, like the state is experiencing now, there will be a child care shortage that will impede a speedy workforce mobilization when the economy starts to recover.” Lucia adds, “Now, when the state needs a jobs infusion, the early care and education infrastructure cannot be neglected without lasting repercussions for employers, workers, and the state economy.”