News from the Executive Office

Child Care in State Economies

The Committee for Economic Development just completed an analysis of the economic impact of child care across the country.  As its website states, “Child Care in State Economies examines the child care industry’s effect on parents’ participation in the labor force, and provides extensive details regarding the industry’s state economic impact, including: usage rates, the role of public funding, revenues, and business structure. The report was commissioned by the Committee for Economic Development, produced by the economic firm, Region Track, Inc., and generously supported by the Alliance for Early Success.”

There’s a lot of interesting information in the report.  Here are a few facts that I found surprising.

  • In 2012, child care facilities produced revenue totaling $41.5 billion and employed 1.57 million wage and salary and self-employed workers.
  • In addition to the $41.5 billion in direct economic benefit of the industry, there’s an estimated $41.6 in “spillover” benefits, attributed to the purchase of goods and services by child care providers to run their programs and the purchase of goods and services by the child care workers with their own salaries – purchases that would not have occurred in the absence of the child care industry’s activity or the child care jobs.
  • Service industries of comparable size of revenue include women’s clothing stores, waste collection, and home furnishing stores.
  • The average weekly cost of care roughly doubled in current dollars between 1997 and 2011. The share of households receiving assistance from any source to pay for child care has declined.
  • Total federal and state child care assistance ($15.8 billion) equals 37.8% of total US child care industry revenue.
  • The average child care provider in the US remains relatively small, producing only about $54,000 in annual revenue.
  • More educated mothers make greater use of paid child care arrangements. Mothers with a bachelor’s degree or higher are more than twice as likely to have a child in paid care than mothers with less than a high school education.