Child Care and Economic Development: Markets, Households and Public Policy

By Warner, Mildred E. | International Journal of Economic Development, July 2007 | Go to article overview

Child Care and Economic Development: Markets, Households and Public Policy


Warner, Mildred E., International Journal of Economic Development


Abstract

Child care is a critical community infrastructure important for economic development and family wellbeing. Increased economic interest is being focused on the role of child care in economic development. This requires attention to the structure of the sector, the nature of parental demand and the role of government policy. But it also requires attention to non-market household care. Examples from New York State are presented as context for a set of articles looking at these issues in the U.S. and Canada. The challenges and benefits of an economic development frame are discussed.

Introduction

Child care is now being recognized as a critical community infrastructure for economic development. Child care has traditionally been provided by households, but increasingly parents are turning to market forms of child care while they work. As market based forms of care have grown, increased economic development policy attention is being given to the child care sector. Across the United States and Canada, teams of economic development leaders have come together at the state and municipal level to measure the economic importance of the child care sector and identify economic development policy responses that could strengthen the quality, affordability and economic sustainability of child care businesses (Warner 2006). The American Planning Association's magazine, Planning, recently featured an article titled "Child Care: A Critical Community Infrastructure" (Warner 2007), which challenged community planners to incorporate planning for child care into their work.

The growing interest in the linkages between child care and economic development challenges us to consider the structure of supply in the child care sector itself, the nature of parental demand for care, the nature of the employment in general, and the links between market and household based care. While recognition of the economic development importance of child care opens new policy debates with new stakeholders, it also raises challenges in how we think about market care, home care, work and public policy regarding children and families. This special issue explores those economic development connections and the challenges they raise.

Setting the Context: Child Care in New York State

To set the challenges in context, I present a brief review of the child care challenges in New York State. A 2006 survey of economic developers and chamber of commerce leaders in New York State found:

* 83% agree that childcare should be a part of economic development policy.

* 82% recognize that a lack of affordable, quality, convenient child care reduces worker productivity.

* 67% feel that businesses' ability to attract and retain workers is hurt by lack of quality child care.

* 58% acknowledge an inadequate supply of quality child care in their community (Cornell 2006a).

Given this interest, what do we know about the economic structure of the child care sector?

According to a 2004 study, the formal licensed child care sector in New York State is a $4.7 billion dollar industry (NYSCCCC 2004). It includes center care, nursery schools, Head Start, pre-kindergarten and family home care. These 22,000 child care businesses care for 620,000 children across the state and employ 119,000 workers. This child care serves 750,000 working parents who are estimated to earn $30 billion in annual wages. The importance of child care as an economic sector in its own right, and as a support infrastructure for parents is clearly significant. But it is also inadequate. The study estimates there are 3.4 million children in New York state whose parents work. But only 620,000 are in formal, licensed care. Where is the remainder?

[FIGURE 1 OMITTED]

Child care is a complex sector that includes formal regulated paid care, informal paid care, and informal unpaid care either from households or other relatives and friends. …

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