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Vermont: The Economic Impact of Vermont's Child Care Industry

Project status

Completed June, 2002

Lead Agency

Windham Child Care Association & the Peace and Justice Center

Contact Person

Ellen Pratt
Windham Child Care Center
45 Watt Pond RD
Putney, VT 05346
Phone: 802-387-4512
Fax: 802-387-2142

Research Firm

Doug Hoffer


  • Child Care Labor Force
  • Children Served
  • Gross Receipts
  • Number of Parents with Children in Paid Care
  • Multiplier Effects on Local Economy
  • Percentage of 2nd Wage Earner's Income Spent on Child Care


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

Additional Information

PowerPoint presentation available from Ellen Pratt

Case Study

Case Study: Vermont
“The Economic Impact of Vermont’s Child Care Industry”
Date of Study Completion: June, 2002



The Vermont economic impact study was sponsored by Windham Child Care, a resource and referral agency, and the Peace and Justice Center, a Vermont based nonprofit. These organizations contracted with an independent policy analyst to conduct the study.

The advisory committee consisted of a number of child care professionals, academics and government officials. Members of the business and economic development communities were not directly represented.


The intent of this study was to show the link between child care resources and the State economy. The sponsors were especially interested in illustrating how investments in child care infrastructure can have direct positive effects on the Vermont economy and the State's ability to experience growth. The ultimate goal was to begin to integrate child care planning into local, regional and state economic development plans. It was believed that an economic impact study would not only help to reach these goals but also expand the child care industry’s vocabulary so that it could communicate more effectively with the business community.

Funding came from the Vermont Department for Children and Families Child Developmental Division and the Autumn Harp Foundation. The layout and design of the report, as well as printing, were donated.

The Study:

Sector Definition

This study defined child care as all early care and education, from birth to age 11, in all types of facilities. This includes licensed child care centers, regulated family child care homes, Head Start and preschool. (Vermont licenses child care and preschools operated by school districts.) Although regulation-exempt care was not included in gross receipts, the study does estimate the earnings of both regulated and non-regulated child care providers, and reports these data.

Data Analysis

Measurement* Vermont
Number of Establishments Not reported
Child Care Labor Force 4,999
Children Served 40,000
Gross Receipts $208 million
Number of Parents with Children in Paid Care X
Multiplier Effects on Local Economy X
Governmental Transfers / Subsidies  
Tax Receipts / Fiscal Impact  

*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, pre-k in public schools and estimated unlicensed care but excluded informal care. Regulation-exempt family care was only included in the labor force data. The Child Care Labor Force number includes only regulated child care (all non-parental, non-relative, child care, including licensed centers and registered family child care providers regulated by the state). In its definition of gross receipts, this study multiplied the average cost of care by the number of children in child care.

Input/Output analysis was used to determine the direct and indirect economic impact of the child care industry in Vermont. One of the group’s major concerns was the extent to which parents’ wages are linked to the child care industry. Other data presented included the number of children receiving subsidies, State and Federal CCDF expenditures, a cross sector look at median hourly wages, and the supply of child care over time.

Unique Findings

The Vermont report includes a pie chart that shows child care expenditures as a percentage of a family's basic needs budget. For families with two working parents, the report calculates the percentage of the 2nd wage earner’s income spent on child care (which ranged from 22%-34% of their income.)


Organizational Change and Outreach

One of the ways this study attempted to increase its credibility to economic development and state policy personnel was to rely heavily on language common to economic development:

  • “Pumping money into local communities”
  • “Creating jobs and generating taxes”
  • “Social Infrastructure”
  • “Insufficient supply of…child care negatively impacts Vermont’s economy”
  • “For many small businesses…child care is essential”

Post-report outreach was also a key strategy in Vermont. A big roll out of the report for local media as well as presentations to Chambers of Commerce "and anyone else who will listen" helped to engage those who would not normally notice the study. A PowerPoint presentation was developed and Ellen Pratt made "cold calls" to groups, offering to present the report’s findings to business audiences, economic developers and planners. She felt taking the study out on the road to these groups was very important. This was a major change for Windham Child Care, which was used to working with businesses one-on-one with their employee’s child care needs.

Ellen suggests that, if the study is done again, the group should try to get the economic development agency to co-sponsor or help fund it. Working in partnership with economic development would not only increase access to a new constituency but also increase credibility.


While specific policy recommendations were not included in the report, much has happened since it was released.

Approximately one year after the report's release, State legislation was enacted that requires all town plans to include a child care component. A “Child Care Planning Guide” and interactive television event were also produced to guide planners through the process of addressing child care. The state’s economic planning body, the Vermont Economic Progress Council, included a recommendation on child care in its update to the state’s economic plan. The hope is to garner the resources of the state Commerce Department and Economic Development Office to help the industry. Communication now exists between the Economic Development Office and the state Child Care Services Division.

There were questions from some groups as to the validity of the numbers produced in the report; this highlights the importance of having a credible researcher on the project team. There has also been an attempt to get the Vermont Chamber of Commerce on board so that child care can be included in the statewide Chamber’s legislative priorities in the future.

Interview with:
Ellen Pratt, Business Liaison
Windham Child Care Association and the Kids Are Priority One Campaign
June 4, 2004


Download report