Overview: The Regional Economics of Child Care

Abstract

Child care is an economic sector that traditionally has been underrepresented in economic analysis – particularly among regional economists. Child care typically is considered from a welfare or education frame and not as economic sector in its own right. But that is changing. Increased interest is being focused on the child care sector by economic developers, child care policymakers and regional economists. Over the last decade more than 84 regional economic impact studies of the child care sector have been undertaken across the United States and Canada. (see http://economicdevelopmentandchildcare.org/econo mic_impact_studies for a complete list). Each of these studies has reinterpreted child care as an economic sector and sought to develop better data on demand, supply and prices in the child care market. These efforts have been accompanied by increased academic inquiry regarding the determinants of child care prices, sources of geographical variation in linkage and spillover effects of the child care sector, and concerns about the adequacy of models that only look at the formal paid part of the child care sector. The four papers in this special section of the Journal of Regional Analysis and Policy address each of these issues. The child care sector is a complex sector – composed of private market-based center and family care, informal paid market care, free public care (Head Start, PreSchool), and unpaid family care. Parents substitute between these forms of care, and activity in one part of the market affects the others. This makes regional economic modeling of the child care sector difficult. Another difficulty is understanding geographic differences in the composition of the child care