New research arrived this week that shows the early childhood sector is a powerful economic engine, responsible for 2.9 percent of the U.S. gross domestic product.

The sector’s share of U.S. GDP is bigger than both agriculture and utilities, according to “The Economic Value of The U.S. Early Childhood Sector.”

It turns out, all of the money spent on child care, preschools, clothes and other parenting costs as well as health care, for children from infancy to age five totals nearly $400 billion a year, researchers found. (See the issue brief for footnotes.)

In the analysis that was touted as the first of its kind, the early childhood sector was broken down into three segments: family expenditures; early care and education and health care goods and services. Early care and education was the second largest at $157 billion a year, while family expenditures topped the list at $190 billion.

The problem is all of this spending isn’t enough, the report says.

Several indicators make clear that the ECS’s current resources are too small and inefficiently allocated to ensure that all children grow to their full potential. High-quality early learning programs are in short supply and unaffordable for many families. Hospital visits account for close to half of young children’s health care costs, suggesting a lack of emphasis on preventive measures that could reduce dangerous and expensive emergencies. – Issue Brief

The report was funded by the Partnership for America’s Success, a group of executives, economists, policy types, civic leaders and advocates who support smarter investments in programs for children and families.

Smart ECS investments provide returns that can equal or exceed those of many traditional economic development strategies. – Issue Brief.