RELEASE: Increased Funding for Early Care and Education Would Boost California’s Economy

UC Berkeley Labor Center

Contact: Penelope Whitney,

Berkeley, CA –  As legislators in Sacramento consider proposals to improve early care and education (ECE), a new report by the Labor Center at the University of California, Berkeley shines light on the shortfalls of the current system. It finds that increased public spending on early care and education can provide a substantial boost to California’s economy.

  • More women in workforce. The biggest immediate economic impact of increasing investment in early education comes from the effect it has on the employment, earnings, and productivity of parents, especially women. Increasing public investment in ECE in California could bring significant numbers of of women with children into the workforce.
  • Increased productivity for parents. Access to affordable, reliable early care and education enables parents to increase their earnings. Nationally, problems with child care cost parents $8.3 billion in lost wages. Investment in ECE can help working parents recoup these losses.
  • Added ECE worker earnings. Labor Center analysis shows that each dollar invested in early care and education generates as much as $1.88 in increased economic activity through the increase in ECE worker earnings.
  • Good for business. Turnover and absenteeism due to a lack of ECE costs businesses $1,150 per working parent each year.  Providing care decreases employee absences by 20-30 percent and reduces turnover by 37-60 percent, according to national studies.

California stands to benefit in many ways from early childhood education investment, said report lead author Anna Powell, Labor Center Policy Consultant. “Investing in reliable care could not only improve care for children, but also provide better pay for teachers, and engage hundreds of thousands of women who could join the workforce and grow the economy.”

Currently, low wages have created a recruitment and retention crisis among ECE teachers and providers. Since 2008, nearly a third of in-home family child care providers have closed in California, and now, more than three-fourths of children in the state lack access to a licensed child care program. “The childcare shortage won’t end until we pay teachers a living wage,” said report co-author Sarah Thomason, Labor Center Research and Policy Associate.

The Center for Labor Research and Education (Labor Center) is a public service project of the Institute for Research on Labor and Employment (IRLE) at UC Berkeley. IRLE connects world-class research with policy to improve workers’ lives, communities, and society.