The cost of quality childcare while you work

The interview published above is from SDPB’s daily public affairs program, In the moment with Lori Walsh.

What types of public investment in early learning generate the best returns for all of us?

Today we talk about the economics of early learning. Joining us for the conversation, we welcome Ben Horowitz, Marcy Drew and Kayla Klein. Horowitz is Project Director of Community Development at the Federal Reserve Bank of Minneapolis. Drew is director of education with SDPB, Klein is director of Early Leaner South Dakota and also a contract employee of SDPB.

The following editorial was co-authored by Ben Horowitz and Monument Health.

Early childhood education doesn’t just benefit South Dakota children and their parents. Investments in the state’s smallest learners benefit the state’s entire economy and society. When parents know they can choose a source of high quality care for their children, they are able to pursue career opportunities while their children are more likely to thrive.

The Federal Reserve Bank of Minneapolis released a report on early childhood development in South Dakota last year. The report summarizes the results of the bank’s two decades of work to understand the significant public return on investment in high-quality early childhood education for low-income families. It also highlights key data about South Dakota children and the early childhood development ecosystem. For instance:

– Most parents in South Dakota work and are a vital part of the state’s employment base, with a labor force participation rate that exceeds that of parents in other states across the country.

– Childcare is expensive for many of these working parents, especially for those with young children. Full-time care for an infant or toddler in a typical child care setting can cost anywhere from $5,200 to $8,700 per year, depending on the location of the family and the type of provider.

– Finding high-quality child care in South Dakota is difficult, in part because of the structure of the state’s licensing system and a lack of ways to inform parents of the quality of care provided by child care providers.

– As of January 2022, nine counties had no licensed or registered vendors. Most others have very few licensed spaces relative to the potential demand for high quality child care.

Why are the Minneapolis Fed and Monument Health focusing on early childhood education in South Dakota? Our two establishments have understood the importance of the quality and accessibility of childcare services for parents and children in our region. Sometimes we see it first hand. For example, Monument Health staff need safe, accessible, and flexible childcare options for their children while commuting to work. Even with the child care benefits offered by Monument Health, it’s not easy to find.

And access to early learning is also important for Monument Health patients. High-quality early learning environments improve children’s immediate and future well-being by instilling lifelong healthy habits, important social-emotional skills, and a foundation for education from kindergarten to kindergarten. 12th year.

The Fed’s work has tracked the financial returns of these perks as they trickle down to the public and found that they outpace the gains made by the stock market. Children who receive a quality preschool education are less likely to need remedial classes. And as these children get older, they are less likely to interact with the criminal justice system or access the public social safety net.

Returns to the public are greatest when investments in early childhood education reach children who otherwise might not have the opportunity. For example, families whose parents have low incomes may not have access to affordable, quality preschool education. Quality is also important, and investments should support parents by reflecting their preferences and engaging them in their child’s development.

Unlike K-12 education, family tuition accounts for the bulk of child care market revenue. While some parents are successful in finding an affordable quality option, many families face a lack of available supply or cannot afford the prices. And yet, parents’ tuition fees barely support the market.

Child care providers typically operate on low margins, and most child care workers in South Dakota earn $10 an hour or less. Low salaries make it difficult to achieve quality because talented early childhood educators and potential caregivers can earn more for less demanding work.

What can South Dakota do to better support its working parents, young children, and economy? Economists, neuroscientists and medical professionals agree that understanding — and improving — the state’s landscape for its littlest residents is an essential first step.

Comments are closed.