Smart Start Early Care and Education Finance Reform

1
Smart StartEarly Care and EducationFinance
Reform

• Discussion 1.
• Framing Investment in Early Care and Education as
  Economic Development

Mildred Warner, PhD Department of City and
Regional Planning Cornell University mew15_at_cornell
.edu
January 26-27 Greensboro, NC
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Child Care Finance asEconomic Development

• What is economic development?
• Growth in jobs and income
• Human development (literacy, health)
• Choice and freedom
• Sustainability
• How can we count the contributions of the child
  care sector?
• How can we use an economic development frame to
  increase public and private support for child
  care?

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Counting the Economic Impact of Child Care
Direct Effects (gross receipts, employment)
Impact of Parents Earnings (infrastructure)
Indirect and Induced Impacts (economic
multipliers)
Total Impact on the Economy (output, employment)
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Basic Data is Critical
Direct Effects include gross receipts
capacitychargesgovernment revenue
(Includes private and publicly funded
programs) number of workers - hard to get good
estimates Other Useful Data establishments,
children served, parents served Must know these
to calculate economic impact and compare child
care to other sectors
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Direct Effects Allow Comparison to Other
Industries

• Output in Tompkins County in 1998
• Total Economy 4.2 Billion, 60,000 jobs
• Colleges, Universities, and Schools
• 759 Million, 18,000 jobs
• Child Care 15.2 million, 700 jobs
• Local Transportation 11.9 Million, 248 jobs
• Hotels 23.8 Million, 560 jobs

From IMPLAN Database, 1998, CCRR data 2001
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Multiplier EffectsInput-Output analysis
calculates the ripple effects of an industrys
spending in the local economy.
Direct Effects Child care centers take in
revenue.
Total Economic Impact of Child Care
1
?
Indirect Effects Centers make purchases.
?
Induced Effects Centers pay worker wages.
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Every 1.00 spent on child care generates 1.50 -
3.50 in the larger economy.
Output Multipliers Increase with the Size of the
Economy
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Employment Multipliers
Every child care job generates 1 1/3 to 2 jobs in
the wider economy
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A Simplified Input-Output Model
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Child Care Enables Parents to Work
Average Wage in Tompkins County 31,575
Number of Parents using Paid Child Care 3500
Total Impact of Parents Earnings 112.3 million


How much can child care count as its contribution
to the parent wage impact?
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Counting the Economic Impact of Child Care
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Build Public/Private Partnerships and Coalitions
with Business and Government

• Tompkins Co. Early Education Partnership
• Led by Chamber of Commerce
• Includes Day Care and Child Development Council,
  banks, employers, foundations, government,
  workforce development
• New voice for child care, new solutions
• Goal Community Fund for Child Care
• Universal access to affordable quality care for
  all families

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Uses of Impact Studies - Welfare as Economic
Development

• In Tompkins County only 1 in 8 eligible children
  receive child care subsidies.
• The Partnership determined if government funded
  all eligible children in Tompkins County it would
  return
• 9 million in federal and state taxes to the
  local economy
• stimulate 5 million in local economic impact.
• The Chamber of Commerce is sponsoring an employer
  outreach campaign to Fill the Gap!

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Uses of Impact Analysis - Comparison to Other
Policy Sectors

• In New York State, Child Care has economic
  impacts (1.94) similar to
• local interurban passenger transit (1.85),
• job training (1.95),
• elementary and secondary schools (2.01),
• colleges and universities (1.95).
• NYS Type II output multipliers, Implan 1998
• Is child care getting a similar level of subsidy?

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Broadening Public Support

• Economic development arguments can help us to
  broaden the collective responsibility for care.
• Be careful in framing this argument not to
  undermine the educational and social values of
  care.
• Remember, economic development itself is now
  being framed in broader terms - sustainability,
  human development, choice and freedom.