Switzerland: More daycare centers, more economic growth

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One study assumes that with investments in the expansion of early intervention, economic growth increases noticeably GDP should grow by around 3.4 billion francs per year. With the study on behalf of the Jacobs Foundation, the BAK Economics examined the economic effects of a qualitative expansion of day care centers and day care families as well as accompanying support programs for disadvantaged children in Switzerland. The first to report on the NZZ am Sonntag.

In its study, the BAK Economics examined the economic effects of a 10 year investment program in the field of childcare. The authors come to the conclusion that targeted investments in support offers for children between 0 and 4 years of age pay off for the state after a good ten years. Setting the course in the first four years of life would benefit communities, parents and children, regardless of their origin, place of residence or income. The BAK economists differentiate between several positive economic effects. The parents' increased employment through early intervention increases income and productivity as well as purchasing power and human capital.

Those who benefit from higher education also lower health costs and receive social assistance less often. More education ultimately means higher income potential (return on education). More investment in what is offered in early childhood is also a contribution to greater equity. Disadvantaged children in particular would benefit more than average from early intervention. In order for the positive economic effects to actually be achieved, however, the quality of the care offers must be kept high. The starting point for the study was a “reference scenario” that depicts today's early stage offers and their financing. There are currently 67,000 childcare places available. This was compared with three expansion scenarios with different effects on costs.

The investment scenario assumes that a total of 21,000 new childcare places will be created over a period of ten years. In addition, in this scenario, the parental contributions for all childcare places, including those that already exist, are reduced. This scenario would cost the state around CHF 794 million a year. Two further scenarios build on the «investment scenario». Additional investments are planned here. All three expansion scenarios assume that half of the additional investments will be borne by government debt and an increase in income tax. BAK Economics published the study on Monday.