Measuring the Impact of Early Care and Education in Georgia

Georgia’s early childhood care and education industry generates $4.1 billion worth of economic activity in the state last year, according to a new study by researchers from the University of Georgia and Georgia State University that evaluates the economic impact of the state’s early education and childcare sector–including universal pre-k, for- and nonprofit childcare centers, home-based care, and Head Start programs. Researchers found that Georgia’s early education and childcare sector is a powerful economic engine, bringing in some $2.4 billion in gross receipts annually across the industry. The sector also has indirect economic impacts that lead to expansion in other, related industries–such as food services, transportation, and manufacturing, for a total $4.1 billion impact on Georgia’s economy. Even larger is the share of Georgia’s economy that is dependent on the childcare and early education sector, that is, the amount of parents’ salaries enabled by having access to childcare. In Georgia, researchers calculated this impact to total between $13.6 billion and $32.7 billion.

Researchers in several other states have conducted similar sector-wide studies, but few are this detailed and broad in scope. Along with the economic data, this study provides useful summaries of existing research on the academic impact of early education, as well as the importance of quality in childcare and early education. The Georgia researchers also present a model for calculating the cost and benefit of improving quality standards: They found that parent fees for Georgia childcare with a quality distinction (including NAYEC accreditation and quality accreditation from the state of Georgia) are 3 percent to 25 percent more expensive than childcare without a distinction. Researchers estimate that the cost of bringing all Georgia childcare providers to a “distinction” level would be $180 million, and that these quality improvements would generate an additional $127 million in economic activity in the state.

The study also profiles Georgia’s childcare employees, providing useful information for policy makers. Some 61,000 Georgia residents, mostly women, work in the childcare and early education sector, earning an average wage of $13 an hour. The survey asked providers about staff turnover (a chronic problem in childcare) and intra-industry staff movement. More than 69 percent of survey respondents reported the departure of at one permanent employee last year, and 53.8 percent reported loosing staff to the state’s growing public pre-k system, which tends to offer better pay and more benefits.

Georgia demographers predict the state’s under-5 population will grow by 1 million by 2030, suggesting significant growth for the childcare and early education sectors in the future. Having a birds-eye view like this of the entire childcare industry, not just public pre-k that policymakers focus on, is an important tool for everyone involved in early education.