Minnesota: The Economic Impact of the Child Care Industry in Minnesota
Project status
Completed Fall 2003
Lead Agency
Minnesota Child Care Resource and Referral Network
Contact Person
Ann McCully, Executive Director
MN R&R Network
380 Lafayette Road, Suite 103
St. Paul, MN 55107
Research Firm
National Economic Development and Law Center
2201 Broadway, Suite 815
Oakland, CA 94612
(510) 251-2600
jen@nedlc.org
Measurements
- Child Care Labor Force
- Gross Receipts
- Multiplier Effects on Local Economy
- Governmental Transfers / Subsidies
Outreach
- 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: Minnesota
“The Economic Impact of the Child Care Industry in Minnesota”
Date of Study Completion: Fall, 2003
Initiation:
Membership
The statewide child care economic impact study in Minnesota was conducted by the National Economic Development and Law Center (NEDLC) as part of a national imitative funded by the Kellogg Foundation. NEDLC partnered with the Minnesota Child Care Resource and Referral Network to form an Advisory Board made up of statewide leaders in the fields of business, government, child care, and economic development . Unique to this group was the involvement of the Federal Reserve Bank of Minnesota and a representative from the Commission on the Economic Status of Women .
Context
Prior to the report, Ready 4 K, a campaign working to bring about comprehensive policy change on behalf of the child care industry in Minnesota , kicked off its Minnesota School Readiness Business Advisory Committee (MSRBAC), an effort to engage the business community to play more of a role in advocating and supporting child care. Additionally, Art Rolnick, of the Federal Reserve Bank of Minneapolis , had recently released a report promoting support of child care as an important aspect of economic development. A conference was held and a new policy committee initiated to address the need for improved child care. These two committees helped propel the findings of Minnesota’s economic impact study and were unique collaborations in a state with a conservative fiscal environment. The main goal of the report was to analyze the significance of the child care industry to the economy in an effort to educate business leaders, policy makers, and the child care sector itself as to the importance of this sector.
The Study:
Sector Definition
This report included all formal full-day and part-day early care and education programs, Head Start, pre-schools, family child care homes, after school programs, and child care centers. This report omits unlicensed care providers because there was a lack of available data, and they felt it was more difficult to ascertain their impact. It also omits pre-schools funded by school districts. By excluding unlicensed child care and pre-schools supported by school districts, the report’s findings underestimate the total gross receipts and direct employment of the child care industry.
Data Analysis
| Measurement* | MN |
| Number of Establishments | not reported |
| Child Care Labor Force | 28,058 |
| Children Served | not reported |
| Gross Receipts | $962 million |
| Number of Parents with Children in Paid Care | |
| 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, and did not include regulation-exempt centers or home-based care (informal care) or 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 government funded programs (Head Start, Pre-K) or provider subsidies (quality dollars, Child and Adult Care Food Program, etc.)
Unique Findings:
The Minnesota study is unique in its approach to engaging the business community. The study provides Minnesota-specific data on how child care affects the bottom line in businesses. For example, the report cites data on how child care can reduce absenteeism and retention:
- In 2002, 22.6% of Minnesota parents indicated they have been late to work, left work early, or missed work in the past 6 months because of child care issues.
- There is considerable evidence that child care benefits increase employee retention. In an internal survey performed after Carlson Companies instituted on-site child care at its headquarters in Minneapolis, 94 percent of parents using the center said that if they were considering other employment, the benefit of the on-site child care center would be one of the factors that they would consider in remaining with Carlson.1
- In addition to retaining employees, stable, quality child care options also enable parents to continue to advance in their careers after they have started a family. In Minnesota, 24.7 percent of parents with young children ages zero to five said that problems with child care in the last 12 months prevented them from keeping or accepting the kind of job they want.
- Additionally, the report tracks trends in labor force participation, population growth by age and employment outlook.
Impacts:
Organizational Change and Outreach
The Minnesota Child Care Resource and Referral Network strengthened its relationship with Ready for K through the process of performing the study. Post-study they created an intentional effort to reach out to economic development entities and planning/zoning organizations. The MN Resource & Referral Network also changed the title and role of a staff person from Employer Services to Business Partnerships, dedicating more time and energy to building relationships with the business community.
Policy
There were three main policy goals that emerged from the report:
- Involve business in the child care industry through tax credit legislation to promote investment in child care.
- Enhance the quality of the child care industry through established standards and incentive programs, improved wages and benefits for skilled employees
- Build a coordinated early education and care system
Currently there are three subcommittees of the newly formed Minnesota School Readiness Business Advisory Council working in partnership with Ready for K on the following initiatives:
- Public Policy: This committee is looking at what priority issues to move forward at the next legislative session.
- Communications: This group is examining how to better convey the importance of investment in early childhood - to both the business community and the community at large.
- Best Practices: This committee is focused on developing new ways of getting employers themselves to champion the idea that they can do more for their employees with work-life policies, including support for child care issues.
Interview with:
Ann McCully, Executive Director
Minnesota Child Care Resource and Referral Network
June 11, 2004
[1] Carlson Companies. Internal survey, 2001. Minneapolis , MN .