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Minneapolis, Minnesota: The Child Care Industry: Supporting Jobs and Economic Development in Minneapolis

Project status

Completed June, 2003

Lead Agency

Greater Minneapolis Day Care Association

Contact Person

Nancy Johnson
1628 Elliot Ave. South
Minneapolis, MN
(612) 341-1177

Research Firm

Michelle Odom


  • Number of Establishments
  • Child Care Labor Force
  • Children Served
  • Gross Receipts
  • Number of Parents with Children in Paid Care
  • 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
  • Sent Out an Outreach Letter
  • Involved Business / Economic Development
  • Worked with a Professional PR Consultant

Case Study

Case Study: Minneapolis
“The Child Care Industry: Supporting Jobs and Economic Development in Minneapolis”
Study Publication Date: June 2003



The study was an initiative of the Greater Minneapolis Day Care Association's (GMDCA) Child Care Financing Project in collaboration with Cost of Living, Inc. and funding from the U.S Department of Education and the Jay and Rose Phillips Family Foundation. The report was produced under the advisement of a diverse group of organizations, including non-traditional partners such as the Minnesota Department of Employment and Economic Development , the University of Minnesota , a representative from the MN House of Representatives, the Hennepin County Planning Agency, as well as the Minneapolis City Council's Family Support Specialist.


Prior to the study, the new Mayor of Minneapolis threatened to cut more than half of funds that GMDCA was receiving, including parent affordability scholarships, training for providers and lead abatement in family child care homes. A financial crisis for the City’s child care infrastructure loomed, while advocates for a new baseball stadium released an economic impact report to lobby for public financing. This prompted GMDCA to do an economic impact analysis of child care just for Minneapolis. When several County Commissioners read the Minneapolis Study, they worked with GMDCA to raise the funds to repeat the study for Hennepin County.

To their advantage, at the same time Art Rolnick, a senior researcher at the MN Federal Reserve Bank, was promoting his study that investment in child care does have a huge public return. This study was a much needed wake-up call in the state of Minnesota (see Minnesota Case Study for summary of Art Rolnick’s message)

The report had four main focus areas including supporting jobs and economic development, providing key economic infrastructure, supporting businesses and working parents, and investing in future workforce development. In addition, Minnesota has one of the highest percentages of working mothers in the country (66% vs. 58% average nationwide). It was emphasized that these mothers can’t work as effectively until they have good child care.

The Study:

Sector Definition

The main source for data was the Child Care Resource and Referral database collected and maintained by GMDCA. All providers in GMDCA's database were used including child care centers, licensed family child care homes, preschools/nursery schools, and school age sites. Additionally Head Start/Early Head Start programs were included.

Data Analysis

Measurement* Minneapolis
Number of Establishments 711
Child Care Labor Force 1,867
Children Served 12,494
Gross Receipts $161.5 million
Number of Parents with Children in Paid Care X
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. This study included licensed and regulated center and family care, regulation-exempt family care and education (church based or government funded Head Start, pre-K) and did not include informal care. In its definition of gross receipts, this study included parent fees, provider subsidies (quality, CAFP), and government funded programs.

A key frustration was the lack of information about unlicensed care, a significant portion of the child care industry in Minneapolis . As a result, this sector was not counted in the report. Another challenge was the lack of accurate information about capacity as the licensing data used over counts the regulated supply of family child care. Finally, due to time constraints the group was not able to explore workforce and tax issues as much as they would have liked.

Minneapolis had a staff person dedicated to data who was familiar with the navigation of the numbers and databases. Additionally, they were able to find a local consultant, Cost of Living, Inc., who could run the IMPLAN software.

Unique Findings:

  • The report profiled the mean annual income of 7 important occupations in Minneapolis, including Health Care and Social Services, Retail, Finance and Insurance, Hospitality, Educational Services, Other Services (i.e., Parking Lot Attendant) and other (i.e., Receptionist).
  • The report also broke down the percentage of these industries employing families who receive basic sliding fee child care assistance with the following results with the largest portion represented by the Health Care & Social Services at 26%.


Minneapolis’ diverse advisory committee involved those who had an economic perspective as well as those with strong research backgrounds. However, the most important collaboration for Minneapolis and the state of Minnesota was with other early care advocacy organizations, such as Child Care Works, Congregations Concerned for Children, Head Start and Ready for K. They are now working together to leverage public money with a stronger voice of collaboration. As a result, 180 CEOS are part of the Minnesota School Readiness Business Advisory Council (MSRBAC) working to recommend policies and increase public and private investment to support early care that prepares young children for kindergarten. Additionally, GMDCA is working with Ready for K’s BUILD funded initiative to implement an early care and education system “roadmap” for Minnesota to ensure that all children enter kindergarten ready.

Rather than sending out a general press release or hosting a press conference, the GMDCA met with key media individually to pitch the story at the time of its roll out. As a result, editorials appeared in both major papers. They also worked with the MN News Connection, a collaboration of non-profits which funds a professional reporter who develops and distributes radio feeds primarily to rural areas, spinning news stories from the perspective of valuing and investing in people and communities. Additionally they brought the report to Chamber of Commerce meetings where they spoke with individual business members about the report, and announced the reports’ findings in the “what’s new” portion of these meetings. A copy of the report summary with a cover letter was also sent to every licensed Child Care provider in the county, and was presented to the City Council’s Committee on Economic Development as well as the full County Board. Finally, with funding from the McKnight Foundation Ready 4 K is enabling 36 communities across the state to conduct their own assessments of early care and education, including some of the economic impacts.


While Art Rolnick’s research has had the most significant impact on galvanizing the business community behind this issue, the Economic Impact Studies of Child Care in Minneapolis, Hennepin County and for the entire state have also helped to shift the debate on why MN should invest in child care. MSRBAC’s success in engaging business leaders was built on framing child care as a critical infrastructure support, like roads and bridges, for today’s working parents as well as a critical foundation for K-12 success to ensure a competent work force in the future. As a result of the partnership forged by Ready for K with child care, Head Start, school readiness programs and the Early Childhood Family Education (ECFE) initiative, early childhood advocates are working together to speak with one voice for policy recommendations.

GMDCA's economic impact report recommends incorporating child care and early education into the City and County economic development strategy, restoring $98.9 million in state budget cuts in fiscal years 2003-2005, restoring Child Care Assistance program eligibility for families earning up to 75% of median income, and lifting the state-wide freeze on market-rate reimbursements for licensed providers.

Interview with:
Nancy Johnson
Director, Child Care Financing Project
Greater Minneapolis Day Care Association
July 8th, 2004