Transcript No Slide Title

Understanding Child Care in the
Regional Economy
Presented to the Community Development Society
St Louis, MO
June 28, 2006
Mildred E. Warner Ph.D.
Dept of City and Regional Planning
Cornell University
http://economicdevelopment.cce.cornell.edu
What is the Economic
Importance of Child Care?
» Children - Human
development (cognitive and
social skills)
» Parents – labor
mobilization, career choice
» Regions – Child care as an
economic sector
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Special Issue on the
Economic Importance of Childcare
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•
Regions
Putting Child Care in the Regional Economy: Empirical and Conceptual
Challenges and Economic Development Prospects, Mildred E. Warner,
Cornell University
Beyond Looking Backward: Is Child Care a Key Economic Sector? James
Pratt and David Kay, Cornell University
Rethinking the Child Care Sector Nancy Folbre, University of
Massachusetts-Amherst
Parents
Choice and Accommodation in Parental Child Care Decisions, Marcia K.
Meyers and Lucy Jordan, University of Washington
Child Care, Female Employment and Economic Growth, Jean Kimmel,
Western Michigan University
Children
Costs, Benefits, and The Long-Term Effects Of Preschool Programs, W.
Steven Barnett and Debra J. Ackerman, NIEER, Rutgers University
Policy Implications
Smarter Reform: Moving Beyond Single Program Solutions to an Early
Care and Education System, Louise Stoney, Anne Mitchell, Alliance for3
Early Education Finance and Mildred E.Warner, Cornell University.
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Conceptual Challenges:
Regions
• Which linkages to count?
» Backward, forward, both
• What part of the sector to count?
» Paid vs unpaid, market vs nonmarket, formal vs
informal
• Implications for Economic Development
Policy
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Linkages - Forward and
Backward
• Multipliers measure backward supply
purchases. Child Care ranks high.
• Child Care is most important for its forward
linkages in the economy
• Child care’s linkage jumps from 20th in
ranking among similarly sized sectors in
NYS to 4th when a total linkage measure is
used.
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(Pratt and Kay 2006)
Counting Child Care Workers Nationally :
Most of the Iceberg Lies Below the Water Line
800,000 paid
workers (BLS
2000)
}
800,000 additional
paid workers
(Burton et al 2002)
2.4 million unpaid care
workers
(93% unpaid relatives)
(Burton, et al 2002)
Unpaid Parental Care
(12% of total U.S. Paid Work
Time, 2005 ATUS)
1.7 million
paid workers
(CPS 2000)
State teams find
20% to 300%
more child care
workers than
Census data
report
(Warner 2006)
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Importance of Household
Production to the Economy
• BEA has developed satellite household accounts.
» Unpaid household labor ranges from 58% (opportunity
cost) to 23% (quality adjusted specialist) to 12% (minimum
wage) of GDP depending on valuation method used
» Household production increases GDP by 26% in 2004–
down from 48% in 1946.
» Rise in GDP accompanied by decline in household
production
» Rising returns to market work relative to household
production
(Abraham and Mackie 2005, Landefield and McCulla 2000)
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Economic Development Policy
• Time to move beyond export promotion as
the primary focus
• Need to invest in services that strengthen the
local economy
• Look at connections between the market and
household production
• Strengthen market care without undermining
family care
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Conceptual Challenges:
Parents
• Look at parents’ allocation of time between market
and family work
• Recognize parents need flexibility in three
domains: work, child care and family
responsibilities (Emlen 1998)
• Choices are too constrained
• Attention to parents’ needs must be part of
workforce policy
(Folbre, Kimmel, Meyers and Jordan, 2006)
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Parents’ Time Use
• American Time Use Survey shows
• Three types of child care:
» Primary – developmental
» Supervisory
» On call
• With increased market work parents reluctant to
reduce primary care (2.6 hours vs 3.2 hours)
• Value of unpaid parental care is 60% of the cost of
raising a child.
• Value of women’s child care exceeds their
earnings.
Folbre 2006, based on ATUS
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The Value of Women’s Child Care Services
Exceeds their Earnings
Relative Value of Child Care, Other Non-Market Work and Market Earnings in
2003 (adults living in households with children 12 or under, no older children)
$70,000
$60,000
Market Earnings
$50,000
Non-child related household
management
$40,000
Non-child related household work
$30,000
Child Care
$20,000
$10,000
$0
men
women
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Folbre, 2006 based on ATUS 2003 using replacement cost approach
The Historic Increase in Mothers’ Labor Force
Participation Rates in the U.S. Has Leveled Off
Percentage of Married Women With Child under 6 in the
Labor Force
70%
60%
50%
40%
30%
Attention to
parents’
needs must
be part of
workforce
policy
20%
10%
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70
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72
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74
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76
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78
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80
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82
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84
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86
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88
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90
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92
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94
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96
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98
20
00
20
02
20
04
0%
Folbre, 2006 based on BLS
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Conceptual Challenges:
Children
• Huge range in cost benefit ratios due to
differences in person, place and context
» Perry Preschool 17 to 1
» Chicago Parent Child 7 to 1
» Abecedarian 4 to 1
• Don’t expect model program returns when you
take this to scale.
• Look at children in context
• Focus on all children, not just poor children
(Barnett and Ackerman 2006)
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A Child’s Eye View
in activity with
at least one
parent
19%
in activity with
adult relative
2%
Why so much
focus on
formal care
when
children
spend so little
time there?
in activity with
adult nonrelative
2%
sleeping or
personal care
48%
in institutional
care
13%
awake but not
engaged in
activity with
adult
16%
Average Time Allocation of Children Under 12 in Two-Child, Two16
Parent Families in 1997, Based on Folbre 2006 analysis PSID-CD
A Comprehensive Solution
• Institutional Support for ECE Programs to ensure
quality.
• Publicly Funded Infrastructure to ensure ECE
professional development, program monitoring,
consumer education, data collection and employer
education.
• Financial Aid for Families to ensure access to quality.
• Work Place Policies (e.g. paid parental leave, flexible
work schedules with full benefits) to ensure parents can
pursue careers and have time to nurture their children.
Stoney, Mitchell and Warner 2006.
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The U.S. Under-Invests in
Children and Families
We don't see a collapsing care system because we don't see care as
a system to begin with.
(Mona Harrington 1999 Care and Equality (p 25)
Public Expenditure
• Enrollment in publicly funded ECE
» Ages 1-2: U.S. 6%, Europe: 3-74%
» Ages 3-5: U.S. 53%, Europe: 66-99%
• Expenditure: US < 0.5% of GDP on ECE, Europe 2-6% of GDP
Work Place Policy
• Full time work: U.S. 40 hrs/week, Europe 35-39 hrs/week
• Required vacation: U.S. 0 days, Europe 20-25 days/year.
• Maternity leave: U.S. 0 weeks, Europe: 12 – 42 weeks 18
Sources: Kimmerman 2001, Gornick and Myers 2003
Why Does the U.S. UnderInvest in ECE?
• It depends on how we frame the debate
» Private Frame - Early care and education is the private
responsibility of parents - Failures are moral, not structural
• Beginning to see ECE as a public responsibility too
» Welfare Frame focuses on poor children only – Head Start,
subsidies.
• But these have expanded since Welfare Reform
» Education Frame – Public responsibility for education begins
at age 5
• Increased public support for pre-school
» Economic Development Frame focuses on infrastructure for
the market not support for both market and family care
• More than 60 state and local teams addressing child care as social19
infrastructure for economic development
Cautions
• Don’t lose sight of the private nurturing role of parents –
support them structurally, not just morally.
• Welfare approaches can undermine efforts to improve
quality and universal access.
• Expanded preschool alone will not solve the problem
• Economic development approaches can create perverse
incentives in a sector like ECE.
• Need to conceptualize the issue from the perspective of
children, parents, providers and the regional economy, in
the short and long term.
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