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Oklahoma: Economic Impact of Oklahoma's Child Care Industry

Project status

Completed January, 2004

Research Firm

Mark C. Snead, Research Economist, Oklahoma State University


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


  • Long Report (15+ Pages)
  • Newspaper Article / Media Coverage
  • Involved Business / Economic Development

Additional Information

Statewide study undertaken as part of a larger project, the Oklahoma State Econometric Model, and funded by the Child Care Division of the Oklahoma Department of Human Services.

Case Study

Case Study: Oklahoma
“The Economic Impact of Oklahoma’s Child Care Industry”
Date of Study Completion: January 2004



The Oklahoma economic impact study was a collaboration between the Oklahoma Department of Human Services Child Care Division and Mark. C. Snead, a research economist at the Oklahoma State University College of Business Administration.


The intent of the economic impact report was to educate legislators and other community leaders who might not have previously seen child care as important but would respond to an economic argument..

When the study began Oklahoma had a strong child care subsidy program, but the State had only a small amount of employer sponsored child care and/or philanthropic contributions to child care. The existing child care subsidy funding from TANF reserves is being depleted and unless state funding for child care increases, cuts will be necessary. Oklahoma also has a statewide child care quality rating system and a 'tiered' child care subsidy reimbursement that pays higher rates to child care programs, based on their star level.

The Governor recently signed legislation creating the Oklahoma Partnership for School Readiness and appointed a 29-member public/private partnership consisting of 13 agency heads and 16 private citizens involved in early childhood education and/or business. The partnership was recently appropriated $2 million in state funds.

The Study:

Sector Definition

For purposes of this study, the child care industry was defined as all licensed and regulated child care facilities in the state. These facilities include child care centers, family child care homes, Head Start programs and government operated facilities. These government operated centers include child care at the Federal Aviation Administration as well as some colleges and universities. In addition to child care programs that are regulated by the OK Department of Human Services, the OK Department of Education funds a universal pre-kindergarten program. These funds flow through the local school districts and most pre-k services are provided by public schools. School-based pre-kindergarten programs were not included in the number of establishments reported in this study, nor was pre-k funding included in the calculation of industry gross receipts.

Data Analysis

Measurement* Oklahoma
Number of Establishments 6,322
Child Care Labor Force 25,569
Children Served 134,000
Gross Receipts $410 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 child care centers (including Head Start) and regulated family child care homes, and did not include regulation-exempt center care, regulation-exempt home-based care (informal care) and pre-k provided by public schools. In its definition of gross receipts, this study included provider charges (parent fees and vouchers in lieu of parent fees), government funded programs (Head Start), provider subsidies (quality dollars, Child and Adult Care Food Program).

The report disaggregates the number of facilities, employees and children served by both child care centers and family care homes and whether the children were in care either full-time or part-time. The study found that child care industry workers contributed more than $16 million in sales and state income taxes in 2003. It is estimated an additional $8 million in tax receipts is generated as a result of the economic activity of child care businesses.

The report also measured how quality impacts revenue per facility and the wages of child care workers. Revenue per child, employee and facility type all increase as the rating of the facility increases. For example “the annual revenue per child of a Three Star center is $1,755 more than the revenue of a One Star center.” The increase is nearly identical for family care homes.


Organizational Change and Outreach

The Office of State Finance which is the governor’s budget office rolled out the report at a press conference held to talk about the state’s need to further invest in child care . It was held in January of 2004 and was covered by local radio, TV and newspaper. The director of the state’s Office of State Finance was selected to make the presentation because he was respected in the business community. Since the roll out in January the report has been distributed to CCR&Rs, state legislators and leaders in the child care community. Policy

There were no policy recommendations included in this report. One of the goals of the report was to increase state funding for child care and since its release there has been an increase in state funding for child care subsidies from $12 million in 2003 to $22 million in 2004.

Interview with:
Nancy VonBargen, Child-care Services Director
Oklahoma Department of Human Services
Mark Lewis, Child Care Division Comptroller
Oklahoma Department of Human Services
July 29, 2004


Download report