Source: “Child Care in State Economies 2019 Update”


Child care providers care for and educate children and enable parents to go to work – but they also have a multibillion-dollar impact on the economy.

“In 2016, 675,000 child care businesses, which are mostly small businesses, produced revenue of $47.2 billion and provided employment for 1.5 million wage and salary and self-employed workers,” according to a new report, “Child Care in State Economies 2019 Update.”

“The purpose of this report is to educate and aid policymakers and business leaders in understanding the structure of the U.S. child care industry and its role in the economy.”

Commissioned by the Committee for Economic Development of The Conference Board, the report was produced by the economic research firm RegionTrack, Inc., and received funding from the Alliance for Early Success.

The report looks at the economic role of the child care industry in three ways:

• “The traditional labor force view of child care as a work, education, and training support for parents

• The child care industry’s macroeconomic role in the U.S. economy, and

• The role played by child care in regional economic growth and development

The traditional labor force view of child care points out what parents know first-hand:

“Affordable child care may encourage low-skilled parents to maintain their connection to the labor force or to upgrade their skills through education — and become more financially independent — both of which contribute to economic growth and productivity over the long-term.”

However, many parents can’t find or afford child care. In fact, “The National Survey of Children’s Health (NSCH) found that about 8.7% of families (2 million) with a child under age 5 had someone quit a job, not take a job, or greatly change a job in the past 12 months because of problems with child care.”

This means a loss of income for families and fewer employees for employers.

At the macroeconomic level, the $47 billion children care industry, generates more revenue than other industries, including:

• spectator sports, which generates $46 billion

• commercial and industrial machinery and equipment repair and maintenance, which generates $37 billion, and

• warehousing and storage, which generates $34 billion.

Child care industry revenue has also grown steadily. “Total revenue increased 13.8 percent between 2012 and 2016 and by 22.1 percent between 2007 and 2016. Longer term, child care industry revenue has more than doubled (149 percent increase) since 1997.”

The child care industry has an added economic impact because it purchases goods and services from other industries, including food, utilities, real estate, and manufacturing services.

The regional economic impact of child care has been considerable. Clicking on an interactive map reveals state-level details, including those of Massachusetts, where 10,458 market-based child care providers generate $1.69 billion in revenue. “This includes 8,307 sole proprietors (family child care home-based providers) and 2,151 child care centers.”

There are also talking points and infographics for Massachusetts (and all the other states).

Given this sweeping, positive impact, child care subsidies become even more important, because they support families and help fuel the economy. Research suggests that “child care subsidies can provide net economic benefits to a state economy even after accounting for the cost of subsidies, depending upon how those funds are raised.”

The report adds, “In short, child care provides a viable means for working parents, often the least skilled, to become more financially independent by engaging in productive work potentially without imposing economic burdens on the broader state economy.”

So everybody wins.

Packed with great information, national infographics, and national talking points, the report should be widely shared with parents, policymakers, and the public, so that all 50 states and the nation as a whole can invest wisely in the educational, family-supporting, and economic power of child care.