Investing In America’s Youngest Children Is Essential for an Effective Stimulus Plan and a Long-Term Boost to Economy


The leading research organization focusing on early childhood education has called on the incoming Obama administration to invest in preschool and child care for the sake of America’s children and as both an immediate economic stimulus and a long-range boost to the economy.

At the request of the president-elect’s transition team, the co-directors of the National Institute for Early Education Research (NIEER), W. Steven Barnett and Ellen Frede, developed policy proposals for the new administration. These proposals are incorporated into a new brief from NIEER – Federal Early Childhood Policy Guide for the First 100 Days.

According to Barnett and Frede, federal early childhood policy changes are an essential element of an effective stimulus plan focused on job creation. They write:

“In order to maximize the benefits of any job creation plan, parents taking jobs need to know their children are in a safe learning environment while they’re at work. Yet, already states are announcing child care cutbacks that will work against the effects of the federal stimulus package.

“Early childhood programs not only will free parents to take new jobs, they can directly contribute in many other ways to the positive effects of a stimulus package.

“If policies are formulated so that programs provide good education and child care, new facilities and expanded services will provide short-term economic stimulus and increase economic growth at no long-term cost to the taxpayer. Multipliers for child care are 1.91 for total output (91 cents in additional economic activity on top of each dollar of federal investment) and 1.50 for employment (1 additional job created for every two new jobs created by federal investments in child care).

“Investments in high-quality early childhood programs also produce long-term economic returns that will help the nation pay-off the costs of the economic stimulus package down the road. In addition to improving early learning and development, high-quality early education decreases school failure, increases economic productivity and decreases crime and delinquency.

“Providing quality early education to every child at ages 3 and 4 is estimated to increase gross domestic product (GDP) by 3.5 percent over the long term.”

Expanded investment in early education was a key plank in the president-elect’s platform. He reiterated his commitment to early education even when challenged late in the campaign about whether such increased spending would be advisable in light of deteriorating economic conditions and the cost of government bailouts and stimulus packages.

Specific recommendations submitted by Barnett and Frede for increased investment included:

• Invest in early learning programs that provide child care as part of the Economic Recovery Plan up to $19 billion over two years:
o $15 billion in grants to states to construct new early care and learning facilities for 1 million more children.
o $1 billion in start-up funds to adequately equip new classrooms.
o Up to $3 billion in matching grants to states to raise quality and increase enrollment for early learning programs that provide child care.

• Increase the Child Care and Development Block Grant (CCDBG) by $500 million to restore purchasing power, expand access to child care access, and improve quality.

• Increase Head Start/Early Head Start appropriations by $1 billion to provide cost-of-living increases, expand coverage, and fund collaborations with state programs.

• Create a presidential Early Learning Council to coordinate major federal programs for early learning and child care and to facilitate federal-state cooperation.

In recent years, federal funding for Head Start and child care has not kept up with inflation. Now, Barnett and Frede write, the economic downturn is having serious negative consequences on state funding for these early learning programs. State budget cuts for early learning programs are anticipated in most states without new federal assistance. Such cuts will stymie the job creation effects of the economic stimulus package and jeopardize the long-term learning and development of our children, the nation’s most precious assets, if parents are forced to enroll children in poor-quality child care to get those new jobs.

Barnett and Frede also call for fundamental changes in the oversight and management of federal early learning policy and programs. Noting that there are more than 70 federal early learning programs or related tax incentives under the jurisdiction of 11 agencies, Barnett and Frede recommend creation of a national Early Learning Council to coordinate major programs for early learning. They write, “The chair of the council must have leverage to coordinate policy across the departments of Health and Human Services, Education, Agriculture, and Treasury.”


The National Institute for Early Education Research (, a unit of the Graduate School of Education, Rutgers University, New Brunswick, NJ, supports early childhood education policy by providing objective, nonpartisan information based on research. NIEER is supported through grants from The Pew Charitable Trusts and others.

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