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Massachusetts: The Economic Impact of the Child Care and Early Education Industry in Massachusetts

Project status

Completed 2004

Lead Agency

State Education Department,
350 Main Street
Malden, MA 02148

Contact Person

Jason Sachs, PhD
Phone: 781-338-6361

Research Firm

Saskia Traill and Jen Wohl
National Economic Development & Law Center
2201 Broadway, Suite 815
Oakland, CA 94612
(510) 251-2600


  • Number of Establishments
  • Child Care Labor Force
  • Children Served
  • Gross Receipts
  • Multiplier Effects on Local Economy
  • Governmental Transfers / Subsidies
  • Tax Receipts / Fiscal Impact


  • Long Report (15+ Pages)
  • Stand-Alone Executive Summary/Brochure
  • Newspaper Article / Media Coverage
  • Conducted a Series of Presentations
  • Involved Business / Economic Development

Additional Information

Child care economic impact data is part of the Community Profiles created by the MA Dept of Education. For copies, contact Jason Sachs.

Case Study

Case Study: Massachusetts
“The Economic Impact of the Child Care and Early Education Industry in Massachusetts”
Date of Study Completion: 2004



The Massachusetts study was written by National Economic Development and Law Center (NEDLC) and a 31-member Massachusetts Advisory board. The Advisory Board made recommendations, provided Massachusetts data, and created strategies for continued use of the study after its completion. The Advisory Board included representatives from child care/education groups, business, and government, as well as from the Women’s Employment and Industrial Union, the Heller School of Social Policy and Management at Brandeis University , the Harvard Graduate School of Education, and the Cornell University Department of City and Regional Planning.


Prior to the study the Massachusetts Department of Education (DOE) had created a set of Early Childhood Indicators to evaluate the state’s early care and education industry. Among other information, the indicators outlined economic data, such as number of employees and gross receipts for the state. The DOE then worked with Cornell University to run input-output multipliers for every county in the state. Following this study completed in December 2002, NEDLC worked with the DOE to bring these two sets of data together in a formal economic impact study.

The Study:

Sector Definition

The Massachusetts study defines the child care sector as licensed center-based care, family child care homes, nursery schools, before-and after-school programs for children ages 5 through 14, public or private pre-schools, and Head Start child development centers. The ECE sector in the Massachusetts report is broader than that used in some child care economic impact studies, and includes the diverse array of formal programs that educate and nurture children from birth through age 14, and highlights the educational benefits of child care through the inclusion of pre-, before- and after-school care and education programs. Jason Sachs summarized this issue by stating “There’s 20,000 kids in public school preschool programs, but are they considered part of the industry? We think they are. They’re serving kids, they’re freeing up the workforce - and they’re also, in Massachusetts, some of the highest quality programs. So in the end, we included everybody, and we called it the ‘child care and early education industry.’”

The definition does not include informal or unlicensed care, and in this sense is a conservative estimate of the child care industry.

Data Analysis

Measurement* Massachusetts
Number of Establishments 12,827
Child Care Labor Force 29,555
Children Served 246,250
Gross Receipts $1.5 billion
Number of Parents with Children in Paid Care  
Multiplier Effects on Local Economy X
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, regulation-exempt center care, and pre-k in public schools, and did not include regulation-exempt home-based care (informal care). In its definition of gross receipts, this study included the provider charges (parent fees and vouchers in lieu of parent fees), provider subsidies (quality dollars, Child and Adult Care Food Program, etc), and government funded programs (Head Start, UPK).

The study used three factors to measure the economic characteristics of the sector. These included: gross receipts (total amount of parent fees and private and public subsidies (from DOE; OCCS, the administrator of the federal and state child care subsidies, and Head Start federal dollars; and USDA food dollars to family child care providers ), total direct employment in the industry, and federal and state monies designated for child care and early education.

Unique Findings

The Massachusetts study cited data from model child development programs, such as the Perry pre-school project, that reduce special education participation of children in low-income families by 19.6 percent. Applying this number to Massachusetts, they found that with access to model child development programs, 10,000 low-income children in Massachusetts could move out of special education. This would save as much as $90 million in taxpayer dollars, and improve academic outcomes for those children.


Organizational Change and Outreach

The Massachusetts Advisory board wanted to produce a report that would both represent statewide results and present data in a way that was useful for local communities. As a reflection of this desire, the Advisory Board created outreach strategies that targeted the local level. The Department of Education administers local early childhood grants called Community Partnerships for Children. There are 165 CPCs, covering 331 of the 351 towns and cities in Massachusetts . Training sessions are held for any CPC coordinator or community interested in engaging local business leaders. Thus far, around 25 CPC coordinators have attended various trainings. Typically, coordinators receive copies of the report, a press release, and a set of FAQs for guidance and dissemination. In addition, the Invest In Children group, a state-wide collaborative effort of state agencies, early education and care and out of school time advocates, and higher education organizations have received the training packets and have sponsored an event on the economic impact of early education and care with Clive Belfield. One local community has already held a mini-conference with about 75 people, including a state representative and local business people. Jason Sachs termed this approach their “army across the state” of individuals who will keep the ball rolling. He stressed, however, the ultimate importance of knowing what you will ask for, once you have gained your audience’s attention. “It’s not hard to say, ‘We’re important, pay attention to us,’ but then, what do you do with that?”


The Massachusetts study makes four main recommendations, which, although quite broad, are broken down into specific points of action for the government, business, and early care and education communities:

  • Incorporate child care and early education as a formal economic development component in state and local planning; 
  • Create incentives for employers to promote and support the child care and early education industry; 
  • Promote increased quality in the child care and early education industry; 
  • Increase accessibility to quality programs.

Interview with:
Jason Sachs, PhD
State Education Department
Summer 2004


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