Be Child Care Aware: Child Care Important Industry Economic Factor For State

Cheri M. Gioe, Merrill, Thomas A., Overstreet, Karen  |  5/27/2005 1:51:36 AM

News You Can Use For June 2005

Child care may not be what comes to mind when you think of economic development or the state’s major industries, but a recent study by experts from two Louisiana universities shows significant contributions.

"When people hear the term ‘economic development,’ what comes to mind probably is an automotive plant or a new retail complex or something like that," says LSU AgCenter child-care associate Cheri Gioe. "But it may be time for them to think again."

Gioe and LSU AgCenter professor Dr. Karen Overstreet point out that a recent study by researchers at LSU and Tulane emphasizes the child-care industry plays a major role in the state’s economy – through the income it generates and the jobs it creates.

That study, "Investing in the Child Care Industry: An Economic Development Strategy for Louisiana," was commissioned by the Louisiana Department of Social Services. It was conducted by Dr. Geoffrey Nagle of Tulane and Dr. Dek Terrell of LSU and is part of a larger research project at Cornell University.

Among the findings in that study are such facts as there are 12,701 child-care businesses in Louisiana, which employ 22,644 workers. By comparison, the oil and gas extraction industry employs 18,278 and hotels and motels employ 17,559 statewide, according to the study.

The study, which looked at licensed child-care facilities, Head Start/Early Head Start programs, family child-care homes and in-home child care, noted that these businesses serve 149,849 children and generate more than $657 million in gross receipts.

"The child-care industry affects the economy in several ways," Overstreet explained of the study’s results and what it means to the state."First, it provides jobs for workers. Second, quality child care affects parents’ wages, since lack of care is a frequent reason for missing work or not working at all.

"Third, the child-care industry has a relatively good multiplier effect. Child-care businesses take in revenue but then make purchases and pay wages to workers who spend money."

The experts also point out that when businesses make purchases and their workers spend their paychecks, new jobs are created in other areas of the economy – so there is a multiplier effect involved in the money generated by child care.

"But perhaps the most significant economic impacts are in the future," Gioe stresses. "Research consistently shows that the first three years of life are the most critical for brain development and success in later life.

"Studies show that children who were enrolled in high-quality child-care programs earlier in life have higher graduation rates and employee productivity. They also are less likely to cost taxpayers money in remedial and special education, welfare or involvement in the criminal justice system."

The Nagle and Terrell study found that for every dollar invested in high-quality child-care programs, the economic benefits were a 1:10 return to society.


The LSU AgCenter’s "Be Child Care Aware!" educational program is designed to educate parents and child-care providers about quality child care. It is funded, in part, through a contract with the Louisiana Department of Social Services’ Office of Family Support.


On The Internet:

Sources: Cheri Gioe at (225) 578-6701 or
Karen Overstreet at (225) 578-6701 or
Editor: Tom Merrill at (225) 578-2263 or

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