Child Care Industry's Economic Impact
February 10, 2004
 
February 10, 2004

URBANA--Child care service providers play a major role in the economy of Champaign County, according to a study by University of Illinois Extension.

"Child care providers directly create approximately 1,185 jobs and $19.1 million in income in Champaign County," said Paul McNamara, an assistant professor and Extension specialist in the Department of Agricultural and Consumer Economics (ACE). "Including secondary effects, we estimate that child care providers generate about 1,601 additional jobs and $30.9 million in income.

"Additionally, an estimated 4,081 working parents depend upon the availability of child care services in order to participate in the labor market in Champaign County."

McNamara and co-author David Hancock, a program assistant in the Department of ACE, announced their findings at a press conference today. Also sponsoring the study were the Child Care Resource Service (CCRS), the Illinois Department of Human Services, and the Illinois Network of Child Care Resource and Referral Agencies.

However, despite the child care industry's economic impact, its contribution to the local economy is often underappreciated, the authors stated.

"In part, this lack of appreciation is because of the sector's numerous small firms and home-based providers, that, so to speak, leave it off the radar screen of many business and political leaders and citizens when they think of economic impact," said McNamara.

Currently, Champaign County has 50 licensed child care centers and 421 licensed providers who offer care in their homes. The licensed centers employ about 759 people and the home centers another 426.

"There are also an undetermined number of centers and home-based providers that are exempt from licensing requirements and many of these are not included in the database accumulated by the CCRS," said McNamara. "Information about these providers remains limited."

Together, the licensed centers and home-based units have a total capacity of 6,779 with about 1,031 vacancies.

"Child care providers directly employ 1,185 people, which exceeds employment in the sectors of engineering and architectural services, feed grains, federal government non-military, and insurance agents and brokers," McNamara said. "By using economic models, we determined that every job created in the child care sector produces another .35 jobs, accounting for another 1,185 jobs.

"As a result, the child care industry's total employment figure in Champaign County exceeds that of insurance agents and brokers, federal government non-military, and feed grains."

The child care industry also makes it possible for a number of parents to enter the workforce.

"By allowing parents with children to enter or remain in the workforce, the availability of child care services increases the supply of labor within Champaign County," said McNamara. "For our study, we calculated a 0.71:1 ratio of working parents to children in child care. With about 5,748 children currently in licensed care, we estimate that about 4,081 people in the county are able to work due to the availability of these services. "

McNamara noted that some families qualify for child care subsidies from the state. In Champaign County, 3,006 children receive the subsidy which generates about $829,000 in revenue for providers.

"We conclude that the child care service sector not only provides an important social service in Champaign County, it also represents an essential part of the local economy," said McNamara.

The entire report is available online at: http://www.ace.uiuc.edu/ruralhealth/reports/related.html

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