America’s Future Early Education System

WHY PUBLIC?

So the potential benefit from early education is substantial. Why does government need to step in? Can’t the market handle this?

No, not well enough. A good early education system will combine three features: accessibility, affordability, and quality. For Americans able and willing to pay a lot for childcare, our current system typically delivers all three. But for those with low to moderate incomes, getting access to affordable care too often means sacrificing quality.¹⁶ A universal system with public funding and some direct public provision would change this. It would ensure good-quality care to everyone at an affordable price.

But let’s break this down. Should government pay for early education? Yes, to make it affordable for all. That doesn’t mean it should be free, as I’ll explain in a moment, but it does mean taxpayers should bear a significant portion of the cost.

Here government already is involved. The federal government funds Head Start, some special education services, and tax breaks for childcare. Some state governments fund preschool for four-year-olds and subsidize childcare for poor families. Yet this is nowhere near sufficient to ensure that everyone has access to good-quality care and preschool.

Do we also need government to provide early education? Yes. That’s the only way to guarantee universal access to preschool and care that’s above an acceptable quality threshold. But we don’t need government to be the sole provider. Denmark and Sweden allow private providers, as long as they meet quality standards. In many districts across America we allow private providers for publicly-funded K-12 schooling (charter schools). We allow private doctors and hospitals to provide medical care for Medicare and Medicaid recipients. We should do the same for early education.

What’s the ideal mix? I don’t know. Maybe it’s 25% of kids in public early education centers, or perhaps it’s 75%. This depends largely on how many private providers can combine good quality with a reasonable rate of return.

WHY UNIVERSAL?

Why should early education be universal? Why not just expand Head Start a bit?

Three reasons. First, it isn’t just low-income parents who struggle to find good-quality care that’s affordable. Middle-class parents do too. Second, family structure and parents’ traits and behaviors are key sources of disadvantage, and they don’t overlap perfectly with family income. If we target low-income households, we’ll miss many children who need help. Third, development of cognitive and especially noncognitive skills is aided by peer interaction. Children from less advantaged homes gain by mixing with kids from middle-class homes, which doesn’t happen in a program that exclusively serves the poor.¹⁷

WHY NOT BEGIN AT BIRTH?

If early education is so great, why not encourage parents to start right after birth? The reason is that research suggests children tend to fare best staying with a parent during the first year of life.¹⁸

So along with facilitating early education for kids aged one to four, we should make it possible for more parents to stay home with their children during the first year.¹⁹ Right now, we require that firms with 50 or more employees grant 12 weeks of unpaid leave to new parents.²⁰ Some large firms offer paid leave, but that’s entirely voluntary. Here too, the Danes and Swedes have it about right. They provide tax-funded paid parental leave for roughly one year. A portion is use-it-or-lose-it for the father; if he chooses not to take any leave, the couple loses that time. Otherwise they are free to split the leave however they like.

HOW MUCH SHOULD PARENTS PAY FOR EARLY EDUCATION?

American parents with a child younger than age five in out-of-home care currently pay, on average, about $9,000 per year for that care. Childcare expenditures amount to 40% of income for families with incomes below $18,000, and 20% for those with incomes between $18,000 and $36,000.²¹ That’s far too much.

How much should parents pay? A sliding scale, with the user fee rising in proportion to family income and capped at around 10%, seems sensible.

Should it be free for those with low incomes? I think that would be a mistake. Early education differs from services that relatively few people opt out of, such as police protection, healthcare, and even K-12 education. Families that prefer to provide stay-at-home parental care for their young children will elect not to use it. This argues for having parents who do use it pay something — even parents with little income. The fee should be modest, but it shouldn’t be zero.

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