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Florida: The Economic Impact of Child Care in Florida

Project status

Completed Fall 2003

Lead Agency

Florida Children's Forum

Contact Person

Phyllis Kalifeh, Executive Director
Florida Children's Forum
2807 Remington Green Circle
Tallahassee, FL 32308

Research Firm

MGT of America, Inc.
2123 Centre Pointe Blvd.
Tallahassee, Florida 32308
Nina Barrios
850-386-3191 x 286


  • Number of Establishments
  • Child Care Labor Force
  • Number of Parents with Children in Paid Care
  • Multiplier Effects on Local Economy
  • Governmental Transfers / Subsidies
  • Tax Receipts / Fiscal Impact


  • Long Report (15+ Pages)
  • Newspaper Article / Media Coverage
  • Conducted a Series of Presentations
  • Sent Out an Outreach Letter
  • Involved Business / Economic Development

Case Study

Case Study: Florida
“The Economic Impact of Child Care in Florida”
Date of Completion: 2003



The Florida Children’s Forum, Inc. contracted with MGT of America, Inc. to conduct a study of the economic impact of Florida’s child care industry. The study was done in partnership with statewide leaders in the fields of business, government, child care, and economic development.


In 1999 Florida enacted school readiness legislation that blended funding streams serving children, including child care subsidy, state pre-kindergarten and early intervention program dollars. The legislation also created a new governance structure, rooted in local community boards, who were responsible for assessing early care and education needs and allocating dollars. However, funding remained tight. Florida does not have a state-wide income tax so it was difficult to come up with state matching funds. Last year, Florida voters approved a voluntary universal Pre-k program for every 4 year old that was to be implemented by Fall of 2005. The legislature was responsible for drafting an implementation bill and allocating funding. This was an intense battle, given the limited resources. The economic impact study was being conducted as this battle ensued.

The purpose of the study was to promote the economic importance of the child care industry to the public and public officials in an effort to gain policy and funding support. Additionally, the report was an effort to connect the sectors of business, financial and government to the child care industry. A main strategic initiative was to engage the business sector and the report was promoted through business journals.

The Study:

Sector Definition

The team defined child care as the full range of early care and education services used by families to educate and nurture young children from birth to age five, and programs for school-aged children before and after school and during vacations. This includes Licensed or Registered Family Child Care Homes, Child Care Centers, Licensed Exempt Child Care Centers, Head Start Programs, Early Head Start Programs, and Pre-K Early Intervention Programs. Individuals employed in the government sector with responsibilities for the administration and/or governance of child care programs--such as child care licensing staff and other state-level administrators-- are not included.

Data Analysis

Measurement* FL
Number of Establishments 15,405
Child Care Labor Force 45,561
Children Served 626,483
Gross Receipts $2.08 billion
Number of Parents with Children in Paid Care X
Multiplier Effects on Local Economy X
Governmental Transfers / Subsidies X
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, regulation-exempt center care, and pre-K in pubic schools, and did not include regulation-exempt home-based care (informal care). In its definition of gross receipts, this study included provider charges (parent fees and vouchers in lieu ), and government funded programs (Head Start, Pre-K) and did not include provider subsidies (quality dollars, Child and Adult Care Food Program, etc.).

Unique Findings

$138.75 million in tax revenue to local and state governments was paid through the child care industry. According to Florida ’s report (see page 17):

“To calculate this effect, the final tax revenue collection levels for 2000–2001 for the state of Florida and the estimated Gross State Product (GSP) were utilized. These two figures provide an estimate of the amount of taxes generated from a given level of output (or gross receipts). For example, in Florida’s case, IMPLAN estimates a total economy output of more than $771 billion. Total state and local taxes are estimated at more than $27 billion. By dividing total taxes by GSP, the ratio of taxes to output is calculated to be approximately $36 per $1,000 in output (or gross receipts). This ratio can then be applied to the output generated within the child care industry (direct effects) and to the additional output generated from the spending of the child care industry and its employees (indirect and induced). With each of these types of output is an associated level of tax revenue generated at the state and local levels. Given this updated and more accurate methodology, MGT estimated that the child care industry itself generates an estimated $74.53 million in taxes at the state and local levels. Revenue collected through the indirect and induced effects of the child care industry generates an additional $34.08 million and $30.14 million, respectively.”


Organizational Change and Outreach

As a result of the study, there has been an increase in activity and interest in investing in child care on the local level. Communities have contacted the Florida Children’s Forum to find out how they can conduct a study to emphasize the impact of child care in their local area. Examples include a Business Roundtable in Naples and a subcommittee on Early Care and Education at the Manatee County Chamber of Commerce.

Florida pitched their report as a business story, not as an educational piece, targeting Business Journals throughout the State. A copy of the Executive Summary of the report was mailed with personalized cover letters and testimonials from key business figures in the Florida to business leaders and policy makers across the state. The Florida Children’s Forum has also been working with individual communities to make the study relevant at the local level. They also continue to promote it to leaders within the state, media, business organizations and grandparents as the retirement community represents a vital sector of the state’s population.


Florida’s report was used as leverage to increase employer contribution to the Child Care Executive Partnership Program, an innovative public/private partnership that matches federal and state funding with contributions from local governments, charitable foundations, and participating businesses on a dollar-for dollar basis to provide child care for low-income working families. Though this practice was in existence prior to the report, the Florida Children’s Forum has a unique approach to policy by asking business lobbyists to commit one hour per week to support children’s issues.

Interview with:
Phyllis Kalifeh, President
Marah Binder, Public Affairs Coordinator
Florida Children’s Forum
June 23, 2004


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