CD360 Notebook

Early childhood development: An economic imperative for Montana

Quality early care and education supports child development and labor force participation

Rob Grunewald | Economist
Deborah Neuman | Funders for Montana’s Children

Published September 25, 2018

This op-ed was first published in the Independent Record (Helena, Mont.) on September 25, 2018.

Across Montana, as the unemployment rate has dropped to its lowest level in more than ten years, business leaders face challenges finding qualified workers to fill job openings. Increasingly, Montana employers report that a shortage of early care programs for infants and toddlers prevents many parents of young children from entering or returning to the workplace. As labor markets continue to tighten, availability of early care programs may affect whether businesses can grow and thrive.

But the shortage of child care programs could have an even bigger impact on Montana’s workforce and economy in the long term. Brain researchers show that the experiences children have during their first few months and years of life create the foundation for future learning. That is, the abilities employers look for are built on the experiences prospective employees had decades earlier.

Providing access to high-quality early care and education programs is one proven way to support children’s learning and development. Research shows these programs can have a positive impact on young children by boosting rates of school readiness and school achievement and reducing grade repetition. In some studies, benefits have been observed well into adulthood.

Funders for Montana’s Children and the Federal Reserve Bank of Minneapolis and its Helena Branch are partnering to provide information on early childhood resources and data and foster partnerships to address key issues facing young children and their families. For the past 15 years, the Minneapolis Fed has published research and articles about the positive economic impact of investments in young children. Earlier this year we released the report Early Childhood Development in Montana. Some highlights:

  • 64 percent of children under age 6 in Montana have all of their parents in the workforce. This means at least 45,000 children under age 6 spend time outside of parental care. The quality and reliability of those care settings can impact child development and the ability of parents to keep their jobs.
  • Full-time child care for an infant (age 2 and younger) in Montana averages $9,096 annually, 25 percent higher than in-state tuition and fees at Montana State University.
  • Availability of early care is a challenge in many parts of Montana, particularly in rural areas. Child care centers are not financially viable in remote areas and home-based family child care faces a number of headwinds, such as job opportunities in other sectors that pay more.
  • Annual average rates of return on investments in high-quality early care and education programs can reach well over 10 percent, especially for young children in disadvantaged situations. Many of these benefits accrue to taxpayers in the form of reduced need for remedial education, lower crime rates, and higher tax revenue.

Montana will likely need a multisector response to address its early care needs. Below are a few examples of how the public, private and philanthropic sectors are providing innovative solutions to the early care shortage in the state.

The Best Beginnings STARS to Quality Program, administered by the Montana Department of Public Health and Human Services, provides parents with information about finding quality child care and connects care providers to pathways for improving quality, such as teacher training. DPHHS also administers the state’s first publicly funded preschool program for 4- and 5-year-old children; STARS Preschool is available in 18 locations across the state.

Private sector innovators are responding by providing on-site child care for employees at firms like Zoot and Printing for Less, two high-tech companies in Bozeman and Livingston, respectively. Meanwhile, MyVyllage cultivates and supports success in home-based childcare and preschool businesses to increase the overall availability of quality early care.

In philanthropy, members of FMC are coordinating efforts to move an agenda forward to increase the availability of quality early care. Partnerships with private sector leaders offer promising opportunities for innovation and progress.

FMC and the Minneapolis Fed are in the process of convening discussions with Montana’s business and community leaders about early care and education issues in their own communities. The goal is to foster strategic alliances and multisector solutions to increase quality early care options, which will benefit the state’s workforce both today and in the future. By combining action and resources from across government, business, and philanthropy, Montana can attain these results.