The Economics of Early Childhood Development


Child Care has three distinct roles in Colorado’s economy. First, the Child Care sector is the source of early care and education for over 300,000 children, preparing them for future success in school and work. Second, child care is an important workforce support for parents and their employers. Third, child care is a viable industry in its own right, over 4,000 businesses generating millions in annual revenues, creating thousands of jobs and with higher output multipliers than other economic sectors—1.86 in Colorado—it supports other industries and stimulates economic activity throughout the economy.


Why Employers Should Care about Early Childhood Development:


  • Your employees will be more productive and committed. If early care and education and health are concerns for your employees, sooner or later they are going to be your concern too. When employees are worrying about child care, missing work to stay home with sick children, or having to quit work because of child care problems, your bottom line will suffer due to lost productivity and the costs associated with employee turnover.
  • You want to attract strong employees. More than half of all Colorado preschoolers have a single parent or two parents working. Women are entering the workforce sooner after the birth of a child, and they're staying longer. Employers who want to attract and keep the best workers are addressing the child development and parenting needs of the changing workforce.
  • You want a tax break. Colorado employers who subsidize employees' child care expenses, contract with a child care resource and referral program for their workplace, or operate a child care center or child care consortium are eligible for a 50% tax credit for these costs.
  • You care about the quality of life in your community. With so many children in child care, the quality of early care and education is of concern to most parents. It should concern employers, educators and policy makers too – in short, all of us -- who care about the quality of life in our communities. Research shows that children – especially from low-income families – who are in high-quality child care are more likely to form healthy relationships with adults and other children, be ready for school, and go on to be productive adults, as compared to children who are in child care settings that are not considered to be high quality.
  • You care about the future workforce. Research shows that 80 percent of brain development happens before age five. During this time of rapid brain growth, the environment of a child has a great influence on the development of cognitive and emotional skills. Addressing child care, health and parenting now means a payoff later with a future workforce that has had a better start in life.


Economic Impact


Colorado’s child care industry:


  • $1.06 Billion – The child-care industry’s contribution to gross state product (GSP)
  • 18,919 – Number of jobs created by the formal child-care industry
  • $7.50 – Government return on $1.00 investment in early child care and intervention over the first 20 years of a child’s life
  • $1.36 – State welfare budget savings from providing $1.00 of child-care services


Source:  Miles K. Light, Ph.D., Research Faculty at the Business Research Division. Leeds School of Business.  University of Colorado.