Government support of early childhood education and care programs for poor and vulnerable children is a worthwhile investment. That’s one of the conclusions of a new paper released today by the Atlantic Institute for Market Studies (AIMS).

The paper suggests the poorest families receive a full subsidy, but the amount be reduced as income, and therefore ability-to-pay, rise. Author Ian Munro says the evidence is clear that high-quality child care delivers long term sustained value for low income families and for society at large.

Munro points out that Canada’s future prosperity will be challenged by demographic change. In the coming years and decades the ratio of working-age adults to children and seniors will drop significantly. Research shows that our standard of living will drop as well unless the birth rate rises, the labour force participation rate increases, and/or the productivity of the work force is improved.

“Early childhood care and education policies have the potential to make advances on all three of these fronts,” says Munro.

In See Dick Grow Old, See Jane Retire, Munro says better and cheaper access to child care will allow more parents (chiefly mothers) to return to work more quickly and more fully.

The paper suggests there are a number of other demographic advantages because child care subsidies help reduce the cost of having a child and make having additional children more financially feasible for more families. At a time when birth rates are dropping that’s good news.

Munro concludes that investments in early childhood care will not only benefit disadvantaged children, but society as a whole through a more productive workforce and by reduced costs for social programmes and the justice system.

AIMS President and CEO Charles Cirtwill says given that governments face some very difficult budgetary constraints for the foreseeable future, public financial support should be targeted to children from lower income families on a sliding scale up to some middle-income level.

“This paper makes it clear that, of all the options available, a universal government or public monopoly for child care provision is the least attractive. An income based voucher system is more cost effective, more flexible, accountable and responsive. By issuing vouchers instead of assigning or building daycare “places” government can provide parents with choice and flexibility that will promote competition among child care providers, and ensure continuous improvement going forward,” says Cirtwill.

Munro’s paper argues against a public monopoly for child care centres.  He points out that the income based voucher system is more cost effective, and also provides more flexibility, accountability and responsiveness than a monopoly system.

Munro adds that to maximize the effectiveness, all government-supported child care programmes should be implemented with a goal of capturing rich, long-term data sets. This information will be useful in learning more about what truly drives quality in early childhood care, it will help to assess the relative strengths and weaknesses of different provinces’ approaches, and it will provide an additional means for parents to hold child care providers accountable, in the same manner as well-constructed student and school assessments do in the K-12 world.

Munro and Cirtwill both conclude that early childhood care and education programmes are expensive propositions and adding to tax or debt burdens to pay for them would be a mistake. They say the programme should be financed by reduced spending in other areas, like corporate welfare or politicized and ineffective regional development funds.

“It is time to choose our priorities,” concludes Munro.

To read the complete paper, click here.