The Economic Argument

Dedicating resources to young children is an economic development strategy.

It is time that Wyoming invests in young children as our most valuable natural resource. We cannot remain competitive without a diverse, skilled workforce, and we cannot build a workforce unless we start at the beginning. Ample research shows there is a strong connection between a community’s and state’s investments in its young children and the strength of the regional workforce, businesses, and the economy. Researchers and economists alike are finding that investing in young children yields both short- and long-term benefits for local economies. Nobel prize-winning economist James Heckman found that investments in early childhood produce the highest return on the dollar compared to other investments in human capital like higher education and job training.[1]

When a community invests in its young children, both businesses and individuals benefit. If we ensure that every child has quality early learning experiences that prepare them for success in school and in life, we generate short- and long-term returns to taxpayers, including:

  • Savings in public education remedial programs of up to $3,700 per child from kindergarten to graduation; [2]
  • Reductions in special education placements of nearly 50 percent through second grade; [3]
  • Decreases in grade repetition of as much as 33 percent through eighth grade; [4] and
  • Savings from crime-related costs of between $2 and $11 per dollar invested in early childhood. [5]

In addition to reducing tax spending, investing in young children and ensuring that today’s kids thrive results in a more productive workforce for the future. Studies show that about 60 percent of all American workers live and are employed in the state where they grew up. [6] Providing Wyoming’s young children with quality experiences will enable them to become the creative, adaptable, team-ready employees of our future workforce.

There are also numerous long-term benefits when businesses invest in early childhood.

Children who experience healthy early childhood growth and development are more likely to graduate from high school and college, and therefore are more likely to have the skills that contribute to a competitive workforce. [3] Today, the cost of not graduating from high school is great. Non-graduates are not as competitive for jobs and make thousands of dollars less per year than their peers who did graduate. Wyoming’s graduating class of 2009 was almost 2000 students short—and the lost lifetime earnings for this class of dropouts alone totals almost $519 million. [4].

Finally, investments in reliable, quality early care, education, and health services for young children not only determine the caliber of tomorrow’s workforce, but they also increase the productivity of today’s working families—an immediate benefit from this investment. Sixty-two percent of children under six in Wyoming live in households where all parents are in the labor force. [7] If these working parents or families feel as though they have high-quality, reliable child care, businesses benefit through improved employee productivity, reduced absenteeism, and decreased turnover. [8] Conversely, when an employee who earns $40,000 calls in sick, a business will lose $217 in productivity per day. [9] Businesses and organizations can incorporate family-supportive guidelines into their HR policies to boost child, family, and business outcomes.

Business development, community improvement and early childhood should be considered together because they complement each other to sustain a balanced economic development strategy. Wyoming’s economic and fiscal policies show a history of wise investments; both dollars and sense support further analysis of investments in our youngest population.

Learn more about how early childhood development will affect our workforce:

[1] Knudsen, Eric, Heckman, James J., Cameron, Judy L., Shonkoff, Jack P. (2006). Economic, neurobiological, and behavioral perspectives on building America’s future workforce.
[2] Belfield, Clive R, and Schwartz, Heather. (2006.) “The Economic Consequences of Early Childhood Education on the School System.” New Brunswick, NJ: National Institute for Early Education Research.
[3] Center for Child Development. (2007.) “LA 4 Longitudinal Report.” Baton Rouge: Louisiana Department of Education.
[4] Wat, Albert. (2010). “The Case for Pre-K in Education Reform: A Summary of Program Evaluation Findings.” Washington, DC: Pew Center on the States.
[5] Wat, Albert. (2007.) “Dollars and Sense: A Review of Economic Analyses of Pre-K.” Washington, DC: Pew Center on the States.
[6] Bartik, Timothy J. (2011.) Investing in Kids: Early Childhood Programs and Local Economic Development. Kalamazoo: W.E. Upjohn Institute for Employment Research.
[7] U.S. Census Bureau. (2011.) American Community Survey.
[8] Shellenback, K. (2004). “Child Care and Parent Productivity: Making the Business Case.”
[9] Wellworks for You. (2012.) “What is the Average Cost of Absenteeism?”