The economic case for early years education: a summary of the evidence
EERC Briefing Note · March 2026
Overview
Investment in early years education and childcare is often justified on equity grounds, but there is also a strong economic rationale. This briefing note summarises the evidence on the economic returns to early years provision — from the perspective of individuals, families, and the public finances — and draws out implications for policy.
What does the evidence say?
For children: High-quality early years provision improves children’s cognitive and non-cognitive development, with effects that persist into adulthood. The most robust evidence comes from intensive early intervention programmes, but there is also meaningful evidence on the effects of mainstream nursery and pre-school provision in England.
For parents: Accessible, affordable childcare increases maternal employment, particularly among lower-income families. This has direct effects on household income and longer-run effects on women’s earnings trajectories and pension outcomes.
For the public finances: Improved educational outcomes reduce the likelihood of later intervention (special educational needs support, exclusions, involvement in the criminal justice system) and increase lifetime tax contributions. Estimates of the long-run fiscal return to high-quality early years provision are positive and, for targeted programmes, substantially exceed the cost of provision.
Policy implications
- The return to investment in early years is highly sensitive to quality. Programmes that improve workforce qualifications and reduce staff turnover tend to show larger effects.
- Universal entitlements generate the largest aggregate impacts, but targeted provision generates the largest effects per pound spent for disadvantaged children.
- Current evidence gaps include the effects of the expanded 30-hour entitlement on child outcomes, and the long-run labour market effects of childcare subsidies in England.