Blog

Marsha Basloe, President of Child Care Services Association

It’s common sense that parents with young children need access to child care in order to obtain and retain a job, which makes child care providers a vital part of local and state economies.  That’s why a report released by the Committee for Economic Development, Child Care in State Economies: 2019 Update is so important. The report reviews the market-based child care industry (which includes centers and home-based child care providers) and estimates that child care has an overall economic impact of $99.3 billion – supporting over 2 million jobs throughout the country.

What the report shows is that there is a strong link between child care and state and local economic growth and development. And, that the child care industry causes spillover effects (additional economic activity like the purchase of goods and services and job creation or support within the community) beyond those employed within child care or the business income of those operating centers or home-based programs.

Here in North Carolina, child care programs have an overall economic impact of $3.15 billion ($1.47 billion in direct revenue and $1.67 billion in spillover in other industries throughout our counties and cities).  Child care programs have an overall jobs impact throughout the state of 64,852, which includes 47,282 individuals who are employed within child care centers or who operate a home-based business plus another 17,570 in spillover jobs – created through the activity of those operating child care programs.

The economic impact of child care matters because it helps drive local economies. When parents can access child care, they are more likely to enter the workforce and stay employed.

Access to affordable child care also supports parents who seek additional education or job training, which can result in higher earnings over an individual’s lifetime. For example, according to U.S. Census Bureau data, the difference between the income of a parent in North Carolina with a high school degree and a parent who dropped out of high school is $6,231 annually[i], but over a lifetime, that’s $249,240 the parent would earn just by going back to school to earn a high school diploma.  If that parent were to enroll in community college, and obtain an Associate’s degree, he or she could earn $10,652 more annually[ii] or $426,080 more over a lifetime compared to a parent who has not graduated from high school.

Earnings for those with a college degree are that much higher — $17,748 annually[iii] for a parent who has a Bachelor’s degree compared to a parent with an AA ($709,920 more over a lifetime). When parents have access to child care, both labor force participation grows (and with that, the ability for parents to support their families) and also the potential for parents to return to school to increase their earnings over the long-term becomes possible.

Child Care Costs & Labor Force Participation

In North Carolina, the average annual cost of child care is expensive. For center-based infant care, the cost is about $9,254 per year, and for home-based care, it’s $7,412.[iv] The cost of center-based infant care exceeds the cost of tuition at our 4-year universities and is 19.2% of state median income. With an understanding of the economic impact of child care, it’s concerning that parents may opt out of the workforce or reduce their hours at work when they can’t afford to pay the cost of child care. It not only means that parents could be less likely to be self-supporting, but that local economies are impacted as well – twice in fact. First, they are impacted by families who without employment may depend on welfare and second, communities are impacted by revenue foregone (no earnings or reduced earnings by those who reduce their hours means less revenue to support basic community needs such as police and fire protection, or local schools).

The CED report finds an economic return related to the use of child care subsidies that support parents in entering or staying in the workforce. CED estimates that for every additional federal dollar spent for child care subsidies to help parents work, there’s a $3.80 increase in state economic activity.

Child Care has a Two-Generational Impact

While I’ve mentioned the economic impact of child care on state and local economies, there is also the two-generational role that child care plays with regard to families and young children. Child care is a work support for parents, but it also enables children to be in a setting that promotes their healthy development and school readiness (while their parents work).  In this way, child care not only has a direct impact on the economy today, but also impacts the economy of tomorrow.

The impact of child care is broad-based:

  • There’s the direct impact of economic activity or revenue generated by those in the child care industry (centers and home-based providers),
  • There’s the indirect impact or spillover impact that results within communities from the operation of these businesses,
  • There’s the employment impact of jobs within the industry and spillover jobs as a result of the industry,
  • There’s the employer impact as parents who have access to child care reliably show up for work and are productive while at work, and
  • There’s the impact on children who have access to quality child care that supports their healthy development.

Check out CED’s Child Care in State Economies: 2019 Update report today.


[i] U.S. Census Bureau, Table S2001, Earnings in the Past 12 Months, 2017 American Community Survey. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_17_1YR_S2001&prodType=table

[ii] Ibid.

[iii] Ibid.

[iv] The US and the High Cost of Child Care:2018, Child Care Aware of America, http://usa.childcareaware.org/advocacy-public-policy/resources/research/costofcare/

Stacey Graham

Stacey Graham always loved working with children and started out as a substitute in the public schools. A friend opened a family child care home and shared how much she loved it and how rewarding it was. Stacey decided to follow suit and hasn’t looked back. She has operated her own program since 2007 and from the outset she understood the importance of education. She started off with the North Carolina Early Childhood Credential, but knew that the basics were not enough to meet the needs of her children.

“Once I really started school, I said, ‘Wow, I didn’t know anything about working with children.’” Stacey continued, “You don’t know what to teach if you don’t go to school. You have to know what to look for in children to do the best by them.”

Stacey kept pursuing her coursework while she maintained her child care home, and eventually earned her Associate Degree in Early Childhood Education. According to Stacey, education has changed since she was young.

“There are a lot of expectations now for five year olds. They have to be able to do so many things. The more I learn, the more I can help them learn.”

She wants to prepare her children for the next level. She feels that the Child Care WAGE$® supplements help her do that, and she has received multiple increases in her awards due to her education gains.

“I love WAGE$. Most of my check goes back into my program for the children. It often supports a special outing and helps my single parents who cannot afford that extra money. It was definitely an encouragement to return to school. I appreciate WAGE$ and T.E.A.C.H. A lot of things wouldn’t have been possible without those two programs working together. They help providers get and do more. I hope both continue.”

Stacey has accomplished so much with her child care program and two-year degree, but she doesn’t want to stop. She’s taking a summer course toward her Bachelor’s Degree and in the fall, she plans to take a full course load and continue teaching.

When she reflects on what makes her proud, it isn’t just her education. She says that the children in her program don’t leave until they age out. “One mom brought her son here when he was six weeks old and he stayed until he went to school. Even at age 11, he still wants to come back and see me. He lives in Florida now and asks to spend the summer here!”

Learn more about Child Care WAGE$® Program here.

Learn more about Teacher Education and Compensation Helps (T.E.A.C.H.) Early Childhood® Scholarship Program here.

Marsha Basloe, President of Child Care Services Association

A few years ago, I had the opportunity to work on an Early Childhood Homelessness – 50 State Profile at a time when states were just beginning to look at early childhood services to young children experiencing homelessness. I was fortunate to be able to work with an intern, Jinha Yoon, who had just graduated from Georgetown and who had a passion for data. Jinha was excited to be part of this project and I was excited to have her ability to do magic with the multitude of data and spreadsheets! The first 50 state profile was released in January 2015 using 2013 data. (Although I had to say good bye to Jinha, I was pleased to be a reference for her first job.)

In 2017, knowing that we needed more recent data, John McLaughlin from the Dept. of Education and I had the opportunity to work with the D.C. Education Policy Fellows Program (EPFP) to update the 50 State profiles. EPFP sponsored by the Institute for Educational Leadership provides wonderful opportunities for Fellows to develop leadership skills and an understanding of public policy. Fortunately, it also includes a major group project.

Three students, Abigail Cohen, Madelyn Gardner and Jennifer McDowell, signed on to help update the 50 State profiles and put their stamp on the new product as their EPFP project. It was fun working with them, answering questions, seeing their research, hearing their ideas, previewing the pages and more. I remember the day they came to present the updated Early Childhood Homelessness in the United States: 50-State Profile to a group of us at ACF. They’d already presented to their classmates as you can see in the picture above. It was released in June 2017 using newer data from 2015 and they had added new related factors – housing cost burden and percent of families with children under age 6 working, but remaining low income.  States immediately used this new information.

Last week, when I attended the National Research Conference on Early Childhood (NRCEC) in Washington, D.C., I had another chance to see them and their work! They had submitted a poster session and had been accepted to present on their project: Exploring Early Childhood Homelessness in the United States: Prevalence and Access to Federal Early Childhood Education Services.  I was the first person to get to their poster session got to hear them talk about the project and all they had learned. I was so pleased for them and for our community. Abby and Maddy (pictured here) stepped up to be part of a leadership program and took great pride in this project. It does make me hopeful that with new, young researchers in our field, we are going to do good things for children and families in the future.

(Basloe was the senior advisor in the Office of Early Childhood at the Administration for Children and Families, DHHS.)

  • 1
  • 2