Study: Early Learning in Kansas Tops Retail Trade in Economic Power

By Andrew Ujifusa — April 17, 2012 2 min read
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Do early-learning programs have a bigger pound-for-pound effect on economic activity in Kansas than transportation, construction, or the retail trade?

The answer is yes, at least according to new report from America’s Edge, a coalition of business leaders that says it supports “proven programs that pay big dividends to businesses both today and tomorrow,” and focuses on getting children ready for the labor force.

The major finding from America’s Edge report is that for every dollar spent on early-learning programs in Kansas, an economic benefit of 68 cents in additional spending is generated within the state. That matches the economic impact of farming, logging, hunting, and fishing, and beats out the impact of the retail trade (65 cents for every dollar spent), mining, oil and gas (49 cents), and manufacturing (46 cents).

“You don’t have to wait for 20 years for that economic benefit to Kansas,” Susan Gates, the national director of America’s Edge, told the Kansas City Star.

The report counts early learning as part of the economy’s services sector, which as an entire category generates an additional 61 cents in economic activity for every dollar spent, meaning that early childcare outperforms the services sector as an overall category by 7 cents per dollar spent. (The study uses a Social Accounting Matrix as the methodology to determine economic impacts, which you can read about here.)

Kansas requires an additional investment of $515 million in early-learning programs to ensure that “all Kansas children under age 5 have access to quality early care and education,” according to the report. But that investment in turn would generate $350 million in new spending in the Kansas economy, including over $80 million for the services sector including mobile phone and cable company revenue, and $60 million in sales in real estate and construction.

America’s Edge says that right now, the state funds $141 million in early-learning programs, generating an additional $96 million in economic activity.

“A lot of it is related to the child care industry that allows parents to work,” Gayle Stuber, the early childhood coordinator at the Kansas State Department of Education, speaking of similar studies on early childhood investment, said in an interview.

Naturally enough, the study doesn’t have a section titled “How Investments in Early Learning Fail to Help Kansas.” But one natural question is that if the K-12 system does not do a good job of building on what children get out of early-education programs, won’t the won’t the benefits of early-childhood education to the children themselves largely fade? Or put another way, could the direct economic benefits America’s Edge describes be overshadowed by the K-12 system’s failure to build on such programs? And could the money be better invested in attempts to improve people’s parenting skills?

It’s also notable that the America’s Edge report doesn’t list any sectors as having a bigger economic impact in Kansas than early-childhood programs, which some folks might quibble with. (America’s Edge is funded in part by the Bill & Melinda Gates Foundation, which provides support to Editorial Projects in Education, which publishes Education Week.)

And of course, with state budgets still strapped, dropping an additional $515 million into one section of the state education department might not be a thrilling idea for Kansas lawmakers. Between 2009 and 2011, for example, state funding for all education expenditures fell by $373 million, according to the state budget office.

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A version of this news article first appeared in the State EdWatch blog.