2. Canadian cost-benefit analyses

Canadian economists have had to be content with simulating the benefits of spending on early childhood programming.^a Canadian studies have also differed from the American “Big Three” by including the immediate reimbursements produced from the increased workforce participation of mothers.

In addition, Canadian studies include the mid- and longer-term repayments from early childhood programs that can be predicted for children.

The first landmark analysis of the economic payoffs of preschool came in 1998, when two University of Toronto professors calculated the impact of providing publicly funded educational child care for all children aged 2–5 years.⁴ The net cost of $5.2 billion annually (1998 CDN dollars) was premised on an overall parental contribution of 20 percent, with individual fees scaled to income. The new system would create 170,000 new jobs, but these would replace 250,000 unregulated child minders, for a net employment loss. New educator jobs were assessed at an average wage and benefit level of $36,000 annually, a significant improvement on remuneration levels at that time.

The authors determined the benefits at $10.6 billion. About $4.3 billion was foreseen for children in improved school readiness, graduation levels and future earnings. The majority, and the most immediate, dividends ($6.24 billion) went to mothers. Affordable, available child care would allow women to work, to shorten their stay out of the labour market following the birth of their children and would permit them to move from part-time to full-time work. This would afford women more financial independence, increasing their lifetime earnings and decreasing their chances of poverty at the time of divorce or widowhood.

Figure 4.2

Figure 4.3

^a Researchers rely heavily on data from the National Longitudinal Survey of Children and Youth, and the Quebec Longitudinal Study of Child Development. These tools track the development of a cohort of children from birth to identify different factors that influence each child’s development. Data is gathered at regular intervals, using voluntary surveys of parents and youth, as well as selective numeracy, literacy and problem solving assessments at different ages.

Next: 3. Developing community capacity to support children