Pay For Success

New papers shine light on economic impacts of early childhood in South Carolina


By Kelly O’Donnell

Early childhood education and care has been shown to poll particularly well across a broad spectrum of voters.  In a 2014 poll, 71% of voters, including 60% of Republicans, supporting increased investment in the early years. What was once viewed as the personal concern of individual families is now regarded as an issue of national importance.  A recent article  in The New Republic put it this way: Child Care Isn’t Just a Personal Problem. It’s an Economic One, Too. Researchers and advocates have long touted statistics on the benefit to children and families of investment in early childhood education, but there is a strong case that state investment in the early years contribute to economic growth and a strong, competitive state economy.

In a new ICS paper, I quantify the bottom line economic impacts of child care and education policies in South Carolina. Early care and education affects the state economy in a wide variety of ways: creating jobs, supporting employment in other sectors, attracting outside investment, and saving the public sector millions in reduced costs for remedial educationaccounting boy, welfare dependency and crime. The results are clear: early childhood is a key investment for South Carolina, one that can contribute to greater economic development both today and in the future.

 

Some key findings:

  • There are more than 8,000 small early care and education (ECE) businesses in South Carolina, most with fewer than 20 employees. 23,432 South Carolinians are employed in home visiting, early intervention, child care, or pre-K.
  • ECE draws $266 million in federal grant funds into South Carolina each year.
  • ECE generates $1.3 billion in economic activity annually. Purchases by ECE businesses and employees support an additional 6,456 jobs in other industries.
  • The economic activity produced or catalyzed by the ECE businesses and institutions generates $44 million in state and local tax revenue each year.
  • Over 50,000 South Carolina working mothers rely on paid child care. Many of these women would be unable to work if paid child care were not available.
  • South Carolina women who would be unable to work if paid child care were not available earn over $1 billion each year.
  • Over 200,000 children under five receive ECE services. High quality ECE improves their chances of success in school and life.
  • High quality ECE engages parents and connects families to the resources they need to stay healthy, safe, and intact.
  • ECE decreases the likelihood of incarceration, welfare dependency and other socially costly outcomes in adulthood.

In an accompanying paper, I also explore financing strategies ranging from utilizing existing funding streams to closing tax loopholes. The goal of this paper is not to endorse any particular approach but rather to provide a menu of options to consider. Some of these options entail viewing ECE from new or non-traditional perspectives: as critical infrastructure, economic development, preventative health care, and the underpinning of a successful K-12 education system.