Young children, families, and our economy gain when we invest in early childhood

By Aaron Sojourner, PhD

The dual responsibility of caregiving and earning a living weighs the heaviest on parents during the first few years of their children’s lives. This burden is not experienced equally across families, just as the resources to carry it are not equally distributed.

In the United States, we invest very little in early childhood, at a time when such investments could relieve parents of hardships, increase emotional well-being for parents and young children, and result in gains in both children’s early development and longer-term economic opportunities.

Families have the least resources earliest in their kids’ lives, a critical period in which U.S. policies should support healthy early development and help families protect their children from adversity. When kids are young, parents are young. They’ve had less time to earn and save, have lower earning power due to less career experience and education, and have lower credit scores—making it more difficult to access credit and borrow against future income. In other words, they have less access to past, present, and future income.

Yet the lowest public investments across the lifespan are in a child’s first two years of life. During those two years, public investments amount to about $8,000 per child, most of which is birth and medical expenses. Once a child turns six and starts attending school, public investments go up to about $15,000 per year. By contrast, public investments for adults over age 65 are about $32,000 a year. Looking only at public spending on care and education, we invest about one ninth as much per child per year in the first 5 years of life as in each of the next 13.

Our policies reinforce parents’ early lack of resources, instead of counteracting it during this critical period.

It is noteworthy that parents of young children participating in the RAPID survey have been reporting ongoing, high rates of material hardship. Over 2022, rates of hardship increased and then leveled off at around 40%. This means that two of every five of households in the U.S. with young children are experiencing difficulty paying for food, housing, utilities and other basic needs. RAPID has also found that when parents experience material hardship, they report high levels of emotional distress which, in turn, is associated with higher rates of emotional distress among their children.

Income-based gaps in development open early in kids’ lives, meaning children raised in lower-income households are at risk of poorer developmental outcomes than children from higher income households. Systemic barriers that some families face affording and accessing essential supports and services, nutritious food, and enriching learning experiences can contribute to this gap. This gap grows over the first five years of life. Once the public starts investing more heavily in kids through K-12 education, many of these gaps stop growing and stabilize, but remain in place.

These gaps are not inevitable and there are things we can do to prevent them from opening in the first place. One study showed that children from lower-income households who were randomly assigned access to two years of free, full-day, high-quality child care starting at 12 months demonstrated greater cognitive skills at age two than higher-income children in the study who were randomly assigned not to be offered access to this high-quality care.

Full-time, no-cost, high-quality early care and education prevented the development gap that would have formed based on economic circumstances.

While researchers gave families access to high-quality child care centers, similar full-day, high-quality child care remains out of reach for most families in the United States.

Parents of young children have long faced difficulties finding quality child care that is both affordable and reliable. Public investments cover on average only 5 hours per week for children under age five. Families are responsible for providing or paying for care the other 163 hours a week. The pandemic exacerbated challenges with access, as child care center closures and disruptions due to staffing challenges have continued to disrupt parents' ability to work, increase stress at home, and force many parents—especially women—to reduce their work or leave their jobs.

Child care providers themselves are experiencing high rates of material hardship, hunger, as well as burnout and emotional distress. In the context of ongoing economic strain and disruptions, 32% of child care providers tell RAPID they are considering leaving their jobs, which suggests that the challenges families are facing are not going away any time soon.

While the challenges of rebuilding a sustainable, supportive child care sector are complex, wise investment in early care and education and family policies can show big returns: they can close early income-based gaps in development, lead to higher earning potential over time for young children, reduce the material hardship and related stress that parents are bearing, and support stable labor market participation among parents themselves.

Let’s do more to support parents at this critically important time in their and their young children’s lives.

Dr. Aaron Sojourner is an Economist and Senior Researcher at the W.E. Upjohn Institute for Employment Research. Sojourner served as senior economist for labor at the White House Council of Economic Advisors during the Obama and Trump administrations.