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Rhode Island: The Economic Impact of Rhode Island’s Child Care Industry

Project status

Completed April, 2003

Lead Agency

Options for Working Parents

Contact Person

Julie Anne Valladares, Executive Director
Options for Working Parents
Commerce Center
30 Exchange Terrace
Providence, RI 02903

Research Firm

Charles J. Quigley, Ph.D. and
Elaine M, Notarantonio, Ph.D.
Professors of Marketing, Bryant College


  • Number of Establishments
  • Child Care Labor Force
  • Children Served
  • Gross Receipts
  • Number of Parents with Children in Paid Care
  • Governmental Transfers / Subsidies
  • Tax Receipts / Fiscal Impact


  • Stand-Alone Executive Summary/Brochure
  • Conducted a Series of Presentations
  • Involved Business / Economic Development

Case Study

Case Study: Rhode Island
“The Economic Impact of Rhode Island’s Child Care Industry”
Date of Study Completion: April, 2003



The study was initiated by Options for Working Parents, a child care resource and referral agency (CCR&R) uniquely linked to the Greater Providence Chamber of Commerce. The Options for Working Parents advisory board oversaw the study and included representatives of the business community, the child care provider community, Rhode Island Department of Human Services, parents, legislators and community advocates. After studying the work done in other states and regions like Tompkins County, NY, Vermont and California, the Board developed a proposal and engaged Charles J. Quigley and Elaine M. Notarantonio, Professors of Marketing at Bryant College , to conduct the study. The study was funded by the Department of Human Services.


The study was initiated in an attempt to demonstrate the impact of the child care industry on the state economy in Rhode Island. Coincidentally, the study was completed at the same time major cuts were being proposed in the state’s child care budget. Specifically, there was a proposal to maintain the current rate of reimbursement to child care providers for subsidy children without prior consideration to a previous plan developed by the child care community to increase the rate. The Economic Impact Study was instrumental in intercepting pending state budget cuts in subsidies to child care.

The main goal of the study was to inform the business community and policy makers about the importance of supporting child care as a vital component of a state economic development plan.

The Study:

Sector Definition

The study examines only licensed providers because of the lack of information on unlicensed care in Rhode Island. However, the report does include the impact of subsidies for those in unlicensed care.

Data Analysis

Measurement* Rhode Island
Number of Establishments 1,516
Child Care Labor Force 7,417
Children Served 33,377
Gross Receipts $228 million
Number of Parents with Children in Paid Care X
Multiplier Effects on Local Economy  
Governmental Transfers / Subsidies X
Tax Receipts / Fiscal Impact X

*Not all studies included the same components making it difficult to compare the numbers provided in this chart with those of other studies. In its definition of the number of establishments, this study included licensed and regulated center and family care, and did not include regulation-exempt centers or home-based care (informal care) and pre-k in public schools. In its definition of gross receipts, this study included provider charges (parent fees and vouchers in lieu of parent fees), and did not include provider subsidies (quality dollars, Child and Adult Care Food Program, etc.)

Gathering the data was a challenge because multiple sources were necessary to acquire the diversity of information needed. These sources include the NACCRAWARE database maintained at Options for Working Parents, the Rhode Island Department of Human Services INRHODES database, and the Statewide Survey of Child Care Costs 2002 conducted by the Schmidt Labor Research Center at the University of Rhode Island .

Unique Findings:

In 2002:

  • Rhode Island’s Child Care industry generated $228 million in revenues, an amount comparable to the Arts, Entertainment and Recreation sectors and about half of what is generated by Transportation and Warehousing.
  • Approximately 37% of all children in regulated care are supported at least partially by subsidies.
  • 76% of all the funds spent on child care subsidies in Rhode Island in SFY 2002 were state funds, the remaining 24% came into Rhode Island through the Federal Child Care and Development Block Grant and other Federal funding.
  • RI ran multipliers on subsidy dollars, and reported subsidies in terms of the number of jobs they created (3,007 in all industries in Rhode Island in 2002) and the amount of money returned to the economy ($125 million in total output in 2002).


Organizational Change and Outreach

Though Options for Working Parents was already affiliated with the Greater Providence Chamber of Commerce, the report strengthened their relationship with the business community. Specifically, the link between parents’ ability to work and child care was recognized by the business community as a result of the study.

The Rhode Island study was presented to various groups including a luncheon for legislators and Greater Providence Chamber members, as well as at the Child Care Providers’ Annual Award luncheon attended by the Mayor of Providence, and a number of business people.


The report did not make policy recommendations but was a factor in the decision not to make cuts in the state’s subsidy program.

Interview with:
Elaine Notarantonio, Professor of Marketing
Bryant College
August 11th, 2004


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