Early Learning – Good for Mums, Great for the Economy
16 September 2014
New research has calculated the economic and social benefits of early learning by modelling the impacts of early childhood education and care on women in the workforce, productivity and vulnerable children.
Too often we measure success or failure in the short term, says James van Smeerdijk, a partner with PricewaterhouseCoopers Australia (PwC) who led the research.
Mr van Smeerdijk says conventional approaches to valuing the benefits of early childhood education and care have been too narrow and the long-term benefits have largely been ignored.
The research findings indicate that providing quality early childhood education and care will:
grow Australia’s gross domestic product (GDP)
improve workforce participation choices for parents, particularly women
help realise the full potential of Australian children
reduce the impacts of disadvantage.
The good news is that the government will save money.
The biggest productivity benefit from increasing participation in quality childcare is the long-term gain from when children enter the workforce, adding to the short-term gains from more parents working.
Children receiving quality early childhood education and care would generate up to $10.3 billion in cumulative benefits to GDP by 2050.
Engaging children from families in the lowest income brackets who presently receive no formal early learning would boost Australia’s GDP by $13.3 billion by 2050.
The effect of a reform that reduces the net cost of childcare by five per cent would increase female participation in the workforce and generate $6 billion for national GDP by 2050.
Combined, all three scenarios would increase GDP by up to $29.6 billion by 2050.
Increasing access to early childhood education would increase costs to government in 2050 but it would only be about a 0.1 per cent increase that would be offset by longer term benefits such as increased tax revenues and higher employment. The research indicates a $1 billion direct benefit to the taxpayer in 2050.
The report acknowledges that the government is spending more on early childcare education and that it is a major expense for many households. Getting the funding model right for childcare is critical, says Mr van Smeerdijk.
‘The objective should be to achieve an equitable balance of public and private investment, while ensuring that all children, regardless of their economic circumstances, get to participate in early childhood care and education services that are far more than a glorified child minding service.’