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Texas: The Childcare Industry and Its Economic Impact in Texas

Project status

Completed December, 2003

Lead Agency

Texas Workforce Commission, Child Care Services

Contact Person

Donna Garrett, Deputy Director
Workforce Development Division - Policy & Development
Texas Workforce Commission
101 East 15th Street, Room 440T
Austin, TX 78778-0001
FAX 512-463-5067


  • Number of Establishments
  • Child Care Labor Force
  • Children Served
  • Number of Parents with Children in Paid Care
  • Multiplier Effects on Local Economy


  • Stand-Alone Executive Summary/Brochure
  • Newspaper Article / Media Coverage

Case Study

Case Study: Texas
“The Economic Impact of the Child Care Industry in Texas”
Report Released: December, 2003



The Texas statewide economic impact study was conducted in-house by the Texas Workforce Commission and its child care experts and economists. In Texas, child care subsidy funds are administered by local workforce boards, which are supervised the Texas Workforce Commission.


The intent of this report was to show that child care is an industry that generates economic impact. The report is short and numbers driven so as to be accessible to the local workforce boards and the business community.

The Study:

Sector Definition

Child Care was defined as all licensed or regulated child care providers. This included day care centers, group day care homes, registered family homes and family homes that are listed with the Texas Department of Protective and Regulatory Services. If a program that receives Head Start or pre-kindergarten funds is licensed, then it is included in this study; otherwise these programs are not included in the sector definition.

Data Analysis

Measurement Texas
Number of Establishments1 23,389
Child Care Labor Force1 109,000
Children Served1 762,582
Gross Receipts  
Number of Parents with Children in Paid Care 558,012
Multiplier Effects on Local Economy X
Governmental Transfers / Subsidies  
Tax Receipts / Fiscal Impact  

1 Not all studies included the same components. This study included licensed and regulated center and family care only.

Rather than calculating gross receipts based on industry revenues, this study estimates the total wages paid to child care workers as well as the purchases made by the child care industry. Multipliers were used to estimate the additional, economic ripple effect of wages paid and purchases made by the industry.

Census and NAS data were used to estimate the number of children in center-based child care. These data were then used to estimate the total annual wages generated by employed parents who use center-based care ($14.5 billion dollars.)

Unique Findings

  • The child care industry is projected to be the 11th fastest growing industry in the State over the next seven years. From 1990 to 2003 the number of people employed in child care in Texas grew by 38%, and is projected to grow another 32% by 2010.
  • Child Care is the 16th largest industry in Texas, representing 1.16 percent of the total State employment base. It is of comparable employment size to the real estate and telecommunications industries.


Organizational Change and Outreach

This report has been used to reach out to Texas Workforce boards, which administer the state’s child care subsidy money. The Texas Workforce Commission has begun working with a number of the State’s business service units to look at child care as a business, and provide business-type training to child care providers. The commission's next step is to design business training specifically for child care providers.


No policy recommendations were included in the report. There have been no major new policy initiatives in the year since this report was released.

Interview with:
Phil Warner
July 19, 2004


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