News Release

October 14, 2004

Report Shows Economic Impact of Child-care Industry is Significant in North Dakota

A new report shows that North Dakota's economy benefits significantly from the child-care industry. According to a North Dakota KIDS COUNT! report, child-care contributes $123 million in revenues to the state each year. In addition, child-care work is the state's 10th largest occupation, employing more than 6,000 people.

"When people think of child-care, they usually focus on its impact on children or its availability," says Richard Rathge, North Dakota KIDS COUNT! executive director. "This report demonstrates that child-care contributes in numerous ways to the state's well being. It is a source of substantial revenues and jobs and, of course, it is an essential service that enables thousands of parents to stay in the labor force and provide for their families."

North Dakota's reliance on child-care is relatively high. The vast majority of children of all ages in North Dakota have parents who are employed. In fact, parents' employment rates are higher in North Dakota than in the nation as a whole, with more than 17,000 North Dakota families paying for child-care.

"Child-care spending has a substantial ripple effect," Rathge says. "When child-care providers receive revenues, they make purchases and pay workers, who also purchase goods and services in the state. Our analysis indicates that for every additional $100 spent on child care, the state will actually gain $153 in economic activity. North Dakota would benefit greatly from future additional investments in child-care."

Increased investment in child-care workers' salaries, which are 63 percent of the state's median hourly wage, would strengthen the industry and help address the high levels of job turnover among child-care workers, according to the report. Nationally, one-third of child-care workers leave their job annually. In North Dakota, 60 percent of child-care teacher assistants have been at their current job less than one year.

While the economic impact of the child-care industry in North Dakota is impressive, the report's data reflect only publicly reported information. A large informal network of child-care exists and adds to the magnitude of the child-care industry as an important revenue and job creating segment of North Dakota's economy.

"North Dakota needs to find ways to bridge the gap between what working parents can afford to pay for child care, and what child-care programs need to operate a program that helps prepare young children for school success," Rathge says. "This report highlights that any investments would also be a boost to North Dakota's economy. This economic framework will enlist new partners to identify innovative approaches to child-care financing," says Linda Lembke, Lakes and Prairies Child-care Resource and Referral director.

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Also posted on the NDSU Extension Service website