An Economic Analysis of the Child Care and Early Education Market in Massachusetts

Given the overwhelming evidence that early childhood development affects later outcomes and that achievement gaps are already substantial by age five, it is puzzling that our society does not invest in early childhood education to at least the same extent as it invests in K-12 education. In Massachusetts, public support for early education amounts to approximately $3,700 per child,1 while public support for K-12 education amounts to approximately $20,000 per child. 

Moreover, there is good reason to expect that without significantly more public financing, the market will continue to provide fewer than the socially optimal number of early education slots, the slots that exist will, on average, be lower than optimal quality, and early education workers will be paid less than they would in a system that delivers optimal care.