Overview: Articulating the Economic Importance of Child Care for Community Development

Abstract

Child care is typically conceptualized as human development or social welfare rather than in an economic development frame. Although economists have recently discovered the importance of early education to long-term human development (Heckman & Masterov, 2004; Lynch, 2004), most policy is still focused on either expanding preschool for four year olds (Committee for Economic Development, 2002) or using child care subsidies to promote work among low income mothers as part of welfare reform (Mezey et al., 2002). The importance of child care for children, workers, and for broader economic development is vastly more significant than can be acknowledged within these limited education and welfare policy frames. The Cornell Linking Economic Development and Child Care project has used the symbol of the three petals of a trillium flower to represent the three most distinctive dimensions of the economic importance of child care: its implications for child development, parental labor force mobilization, and regional economic development. See Figure 1. Child development researchers are concerned with the impact of early care and education (ECE) on long-term cognitive and social skills. Labor researchers are concerned with the labor mobilization and labor productivity of parents afforded by quality child care. Regional economists are concerned with the employment and output contributions to the regional economy of the child care sector and the strength of economic linkages between child care and other sectors. Work in these three arenas has rarely intersected. However, the impacts on children cannot be segregated from the welfare of parents; the impacts on parents cannot be divorced from the health of the economy in which they live; and the health and sustainability of the economy cannot be separated from the prospects for its children. [FIGURE 1 OMITTED] Community development practitioners and researchers must consider the connections between children, parents, and local economies as they address the ECE sector. The papers in this issue collectively sketch out a more comprehensive and integrated perspective of the importance of child care in our economy, and its implications for community development. Child Care's Place in the Regional Economy The article by Warner chronicles a groundswell of interest in the regional economic importance of child care as over fifty-eight state and local teams have come together since 2000 to measure the size and linkages of their child care sectors. Her article demonstrates the many conceptual and methodological challenges faced by these teams. Current data systems seriously undercount care sector work--in part because of the large number of micro-enterprises and informal providers that characterize the care sector. This structure makes it difficult for economists to measure the sector accurately. For child care, the difficulty also stems from gender bias in our economic counting systems and a privileging of exporting industries over local services. Pratt and Kay challenge this orientation in regional economic analysis pointing to the large and growing importance of service sectors in the U.S. economy and the need to look at total linkages, both backward and forward, as a better measure of the contributions of service sectors such as child care. They demonstrate the use of an alternative modeling approach, hypothetical extraction, and show how it elevates child care from 20th to 4th in a ranking of 41 similarly-sized sectors in the New York State economy. The implications for regional economic development practice are exciting. By addressing the conceptual challenges raised by the child care sector, we raise implications for economic development investments in other locally serving sectors that are likely to have a larger and more lasting impact on community development. The export tilt and the bias against local service investment, especially services that meet the needs of workers, families, and women, are challenged as anachronistic. …