In addition to the importance of early childhood development to individual children and the overall success of communities, child care also is an industry that has direct economic impacts.  Child care is a service industry that directly creates jobs, spurs consumer spending, and generates tax revenues.  It also is essential to ensuring that a workforce is available to other industries and is central to moving families from welfare to work.  Finally, as a host of top economists have demonstrated, early childhood development is the public investment that yields the highest economic returns.

The Missouri Child Care Industry Impact Report published by the Missouri Child Care Resource and Referral Network, details some of the industry contributions to economic development.  The report notes that the child care industry in Missouri:

  • Allows more than 120,000 thousand parents to participate productively in the workforce
  • Directly employs 34,000 Missourians in 5,000 small businesses
  • Pays 400 million a year in wages
  • Produces $635 million in gross annual revenues.

A comparable report for the State of Illinois, The Economic Impact of the Early Care and Education Industry in Illinois, outlines similar economic impacts in that state.  In Illinois the child care industry:

  • Provides child care that allows one in every ten Illinois workers to be employed
  • Employs a labor force of 56,000
  • Operates 15,800 establishments
  • Generates $2.12 billion every year in gross receipts

Information on the economic impact of the child care industry on a county-by-county basis in Illinois is available on the Illinois Network of Child Care Resource and Referral Agencies website.

The Linking Economic Development and Child Care Research Project at Cornell University aims to better identify the economic linkages of child care from a regional economy perspective.  Its goal is to support states and localities interested in using an economic development framework to build coalitions with the economic development community, business interests and policy makers to help craft new approaches to child care finance.   The Research Projectwebsite provides a quantitative database of economic demographic and policy data for all 50 states and a qualitative database of all state and local studies (completed and in-progress).  The site also includes research reports, copies of state studies, advice on economic analysis, and profiles of new approaches to child care policy.