Academic journal article International Journal of Economic Development

Childcare, the 'Business Case' and Economic Development: Canadian Evidence, Opportunities and Challenges

Academic journal article International Journal of Economic Development

Childcare, the 'Business Case' and Economic Development: Canadian Evidence, Opportunities and Challenges

Article excerpt


This paper reviews the evidence, opportunities, and challenges associated with the business case for childcare in Canada. In Canada, as in the US, childcare is increasingly framed by the state, business spokespeople, and social actors through economic idioms. In Canada, the business case for childcare authorizes more policy attention and service development, as well as a higher public profile. Concurrently, the approach raises empirical questions, alongside policy and political concerns, about the capacity of the approach to promote a national childcare system.


David Dodge, Governor of the Bank of Canada, has observed that "more should be done to convince politicians of the value of investment in early childhood development" (Dodge, 2003, p. 8). Despite his apparent heterodoxy, Dodge is expressing an increasingly common view: enhanced public spending on childcare is a solid investment, and should be a higher social and political priority. This marks a near-reversal in the realm of policy debate, if not yet policy-making. The human capital approach has become "one of the main Canadian drivers" for early learning and childcare, and the business case is equally prominent in the US (Friendly, 2006, p. 8). (2)

Historically, spending on childcare has been conceived as consumption, an immediate cost to the economy. This perspective is surprising, given the well-known capacity of childcare to support women's employment and its intimate relationship to labour policy (Pierson, 1986; Waldfogel, 2002). Nevertheless, thinking about childcare in North America has been brought to a paradigm shift. The first significant challenge to the traditional approach was child development and 'brain science' research, which convinced observers from economics, politics and health to "embrace the idea that high quality early learning and child care is the foundation for lifelong learning and fundamental for a prosperous twenty-first century society" (Friendly, 2006, p. 7; McCain & Mustard, 1999; Shonkoff & Phillips, 2000).

The tipping point came from analyses of the economic effects generated by childcare. A well-known figure associated with this view is James Heckman, who has vigorously argued for the strong contribution childcare makes to human capital and productivity (James Heckman, 2000; J. Heckman & Masterov, 2004). The discovery of childcare's positive effects on human capital (both child and adult) means positive returns can be realized from social spending on childcare services. As arguments drawing on human capital and brain science ('the years before six last the rest of their lives') aligned, the combination proved potent. Promoters of early childhood care and education now include business leaders, bankers, economists and middle-of-the-road politicians, significantly expanding an advocacy community which had been made up primarily of feminists, the labour movement, and early childhood educators (Prentice, 2001; Timpson, 2001).

Economic arguments are now more widespread than earlier justificatory frames--such as gender equality or work-family balance. When social policy spending is characterized as investment, it has the effect of reorienting decision-makers away from a narrow focus on immediate costs and towards a longer-range perspective on social return. In an era of restructuring and new approaches to social risk, investments in the future seem like the "optimal anchor" for the modernizing redesign of welfare states (Jenson & Saint-Martin, 2006).

Under the business case, significant service expansion is occurring, and the policy status of childcare has risen. Childcare is increasingly seen as a prime site of investment and opportunity, and public spending on childcare is increasing in both the US and Canada. This is one of the chief benefits of the 'business case' for childcare, and one of the main reasons social movement advocates have promoted the perspective. …

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