Investing in Childcare Would 'Massively Increase' Parents' Earnings: Study

While Republican proposals for solving the childcare crisis in the presidential campaign have ranged from recruiting "grandpa or grandma" as babysitters to slashing providers' certification requirements—with presidential candidate Donald Trump failing to give a coherent answer when asked about the issue last month—a new study delivers a simple message about how the benefits of public spending on childcare significantly outweigh the costs.

Researchers at Yale and Brown universities analyzed the universal pre-kindergarten program in New Haven, Connecticut, and found that "politicians could massively increase Americans' earnings" by expanding investments in such programs.

The New Haven program began as the result of a 1996 court ruling and is open to all families in the city regardless of income—but it uses a lottery system for enrollment due to limited funding and space.

The paper the researchers published with the National Bureau of Economic Research shows that parents whose children were selected in New Haven's lottery had 11 more hours of childcare than those who weren't able to benefit from the tuition-free universal pre-K program—enough to increase the parents' earnings by 21.7% even after their kids moved on to elementary school.

That increase makes childcare spending "one of the most effective, pro-work policies in the U.S.," said Washington Post economic columnist Heather Long.

The added earnings stemmed largely from the parents' ability to continue working without taking time off to fill in gaps left by a lack of childcare, particularly because New Haven's program includes extended hours, with children able to attend as early as 7:30 am and as late as 5:30 pm.

The paper emphasizes that families that didn't get a pre-K slot still utilized other childcare programs out of necessity—but they had to pay for them out of pocket and were able to send their children to the programs for fewer hours per week than those who won the lottery.

"A few more hours of care can have long-run returns for families that are quite a bit larger than the costs of provision," Seth D. Zimmerman, a research associate at Yale who co-authored the study, told the Post.

Combining the added earnings for parents and other economic benefits associated with early childhood education, the researchers found, every dollar spent on providing tuition-free full-time childcare yielded $6 in benefits.

"This kind of payoff is almost unheard of in government labor-market policies—much higher than for most other pro-work programs, such as the earned-income tax credit," wrote Post columnist Catherine Rampell in an analysis on Monday.

The study was published days after the White House released an issue brief titledChildcare Is Infrastructure, which the Biden administration said was made evident by its $24 billion investment in the industry through the American Rescue Plan.

"Introduction of universal pre-K across various states led to increased pre-K enrollment and higher employment rates among mothers with young children in those areas on average," said the White House. "Consistent with an increase in overall economic activity, places that introduced universal pre-k also had larger increases in new business applications and the number of establishments than places that did not."

Vice President Kamala Harris, the Democratic presidential nominee, has expressed support for expanding childcare programs and lowering costs for families, including by restoring the expanded child tax credit and providing an extra tax break for families with newborns.

The new study suggests that in the presidential campaign, "childcare should be front and center," wrote Rampell. "If you want to help workers, help them care for their kids."