Economic Effects of Child Care in New Mexico July 25, 2015 CENTER for EDUCATION POLICY RESEARCH

Overview Child care as an economic sector Three-fold effects: o Effects from child care workers and owners earning money o Effects from parents being able to work and go to school o Effects from children having high-quality, nurturing experiences

Child Care Worker/Owner Earnings Output and employment multipliers: o For each additional dollar spent in New Mexico’s child care sector, $1.99 is generated in the local economy. o For every new child care job created in New Mexico, 1.61 jobs are created in the local economy.

Child Care Worker/Owner Earnings Effects of a 3% across-the-board wage increase: o 54 new jobs outside of child care o $1.97 million in additional labor income o $3.74 million in additional value added o $270,220 in additional state and local tax revenue o Cost: $6.5 million, Total Benefit: $8.1 million

Child Care as a Percentage of Total Employment Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages.

Effects on Family Earnings Reliable child care arrangements lead to an estimated $3,867 increase in a family’s annual income. For New Mexico, that means an estimated total of $45.6 million in additional earnings for families receiving child care assistance.

Effects on Family Education National studies find parents receiving child care assistance are 7 to 8 percent more likely to be in school than nonrecipients. In New Mexico, 29 percent of families receiving child care assistance report that it helps them pursue their educations. By comparison,12.9 percent of New Mexicans with children under 5 are in school.

Long-Term Benefits to Children Providing high quality early childhood education services in New Mexico for one year to 21,000 4-year-olds results in an estimated: o 1,213 fewer children ever retained a grade o 803 fewer children ever using special education services o 5,513 fewer years of special education services provided o 882 more high school graduates o 417 fewer cases of child abuse and neglect o 1,323 additional college education years completed o 2,599 more child years of education completed o 2,599 fewer juvenile justice petitions o 323 fewer adult felony convictions

Hailey Heinz Center for Education Policy Research University of New Mexico CEPR.UNM.EDU