Benefits For All: The Economic Impact of the New Jersey Child Care Industry INFANT/TODDLER, PRESCHOOL AND OUT-OF-SCHOOL TIME PROGRAMS
The New Jersey Child Care Economic Impact Council Created in August 2004: • To commission and assist in the data collection for first ever economic impact study of N.J. child care industry (Phase I). • To create new partnerships that build new policy paradigms to support the future state of New Jersey child care industry (Phase II).
John S. Watson Institute for Public Policy of Thomas Edison State College • As the lead agency, the Watson Institute provided leadership, coordination and fundraising for this project. • The Institute has a “Praxis” orientation that enhances its ability to translate policy to multiple constituencies and stakeholders. We are pragmatic, hands-on, and considered to be a “think and do tank” versus a traditional think tank.
Project Financial Partners • Children’s Futures • Hispanic Directors Association of NJ • New Jersey Department of Human Services • Non-profit Finance Fund • John S. Watson Institute for Public Policy of Thomas Edison State College
Child Care and Early Education is Integral to Family and Economic Life in New Jersey. • The child care industry includes infant/toddler, preschool and out-of- school time formal programs in for- profit, non-profit and public settings. • The knowledge base of the industry comes from the science of “child development”.
High-Quality Child Care Enables Future Economic Success in New Jersey • Studies show that high-quality programs increase the quality of life in communities and reduces government spending. • High-quality child care and early education programs lay the groundwork for New Jersey’s future economic success by preparing the next generation with life and learning skills through quality programs.
High-Quality Child Care Enables Future Economic Success in New Jersey Effects of Abbott Preschool on Oral Effects of Abbott Preschool on Early Language Skills at Kindergarten Entry Literacy Skills at Kindergarten Entry 100 100 90 90 80 80 Pre-K Pre-K Experience 70 70 Experience 60 60 Percent correct on Standard Score on PPVT/TVIP No Pre-K Receptive Language Test print awareness test 50 50 No Pre-K Experience 40 40 Experience 30 30 20 20 Source: Early 10 10 Source: Early Learning Learning 0 0 Improvement Improvement Consortium Consortium Receptive Awareness Print Awareness
Child Care Supports New Jersey’s Families and Industries • Child care benefits all industries in New Jersey by enabling parents to work productively outside the home and/or participate in training and education programs. • Child care and early education provides working parents with economic opportunities that lead to self-sufficiency and participation in the economic growth of the state.
Child Care Supports New Jersey’s Families and Industries • Almost 1 in 5 workers has a child under age 13 and lives in a household where all parents work. • Together these working parents earn $20.2 billion every year. • Quality, affordable and accessible child care increases employee retention, reduces absenteeism, enhances the recruitment of skilled workers and increases on-the job productivity.
A Significant Industry in New Jersey The child care industry in New Jersey: • Generates $2.55 billion in gross receipts. • Serves as an economic driver that supports more than 65,300 full-time jobs. • Serves 378,000 children at any given time, and demographic research shows that there is room for expansion now and in the future.
Number of Establishments • 4,337 not-for-profit and for profit licensed centers in New Jersey. • 41% of these licensed centers are tax-paying entities. • 28% are owned by women • 16% are minority owned
Other Types of Establishments • 3,578 registered family child care homes. • 7,212 approved homes • 2,926 DOE publicly funded preschool classrooms across the state: Abbott (38,111), ECPA (7,247), and ELLI (489) districts = 45,847 children enrolled
Gross Receipts of Various Industries, New Jersey, 2005 Nursing and residential care facilities Machinery manufacturing Child Care Hotels (except casino hotels) Scientific research and development Furniture stores Women's clothing stores Apparel manufacturing All farm commodities Spectator sports $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 Gross receipts in billions of dollars A Significant Industry in New Jersey
The Voices of a Business Leader “As the labor force shrinks, it’s more important than ever that quality child care be available, both to make it as convenient as possible for current workers to remain on the job and to prepare the next generation for success in a demanding global marketplace.” Joan Verplank, President, New Jersey Chambers of Commerce
The Voice of a Business Leader “Since implementing the child care benefit we have seen a significant boost in employee morale and attendance, creating a win-win situation for the employer and the employee.” Stephen Chinn, Director of Compensation and Benefits, Novo Nordisk, Princeton, New Jersey
The Voice of a Business Leader “The biggest issue that employers in New Jersey face is how to attract and retain skilled employees. Employers of all sizes, therefore, recognize the importance of child care as it relates to enabling their employees to work and remain with their employer.” Arthur Maurice, First Vice President, Economic Development and Taxation, New Jersey Business and Industry Association
The Voice of An Economist “Most of the numerous projects and initiatives that state and local governments fund in the name of creating new private businesses and new jobs result in few public benefits. In contract, studies find that well-focused investments in early childhood development yield high public as well as private returns. (16% on return on investment-considerably higher than the long-term return from U.S. stocks at 7%.” Arthur Rolnick, Senior Vice President and Director of Research; and Rob Grunewald Regional Economic Analyst, Federal Reserve Bank of Minneapolis
The Voice of An Economist “Early learning begets later learning and later success.” James J. Heckman, Nobel Prize-Winning Economist, University of Chicago
The Report’s Recommendations • Offer cost-effective, family-friendly policies for their employees. • Form a consortium among small businesses to provide child care benefits in a scaleable way. • Give employees the tools they need to find quality child care by linking with child care industry.
The Reports’ Recommendations (cont.) • Advocate for the development of a quality rating system for child care providers. • Advocate for additional funding to expand quality infant/toddler care. • Advocate for comprehensive and integrated high-quality child care system across the state of New Jersey.
The Reports’ Recommendations (cont.) • Invite child care providers to participate in business groups, including chambers of commerce, business roundtables, and provide special incentives and rates for them to join. • Mentor other businesses about best practices in creating child care benefits for their employees.
For more information To obtain additional copies of the executive summary and the full report: Call (609) 777-4351 ext. 4290 or toll free (888) 442-8372 ext. 4290 or visit www.tesc.edu.
Contact Person Ana I. Berdecia Co-Chair of New Jersey Child Care Economic Impact Council & Director for the Center for the Positive Development of Urban Children at the John S. Watson Institute for Public Policy of Thomas Edison State College (609) 777-4351 ext. 4290