Counting Our Losses

Though the importance of early childhood education (ECE) in the United States has gained attention for its economic, social, emotional, and intellectual benefits to children and society, research tells us little about the impact ECE, specifically child care, has on parents’ ability to be productive members of the labor market and economy. Following a recent report from Louisiana that calculates the high cost of child care conflicts to employers and the state economy, the Maryland Family Network, with support by Abell and other funders, launched a study to examine the cost of such breakdowns in Maryland.

The results of their study are presented in “Counting Our Losses: the Hidden Cost to Marylanders of an Inadequate Child Care System.” And they are startling.

For families, employment and education disruptions related to child care are common.

• 49.9% of working Maryland parents with children age 5 and under reported a short-term disruption to employment (e.g., a sick child) in the past three months because of issues with child care.
• 14.7% of working Maryland parents with children age 5 and under reported a long-term disruption (e.g., moving from full-time to part-time work) in the past year because of issues with child care.
• 24.7% of working Maryland parents with children age 5 and under reported forgoing additional educational opportunities because of child care conflicts.

For employers, the economic impact of disruptions related to child care is large.

• In 2016, absence and turnover due to child care issues of working Maryland parents with children under 5 and under cost Maryland employers approximately $2.41 billion.
• In 2016, absence and turnover due to child care issues of working Maryland parents with children age 5 and under reduced Maryland’s economic output by $1.28 billion.

For Maryland, the tax loss is significant: absence and turnover due to child care problems of working Maryland parents with children age 5 and under reduced Maryland’s tax revenue by $117 million in 2016.

Families, employers, and Maryland lose when working parents of children age 5 and under forgo increasing their educational attainment levels because of child care disruptions: the opportunity cost is approximately $2.34 billion per year in lower wages, lower spending, and lower tax revenue.

There are policies that can reduce child care related disruptions among the workforce with children 5 and under. A review of these is not part of this report; some approaches are mentioned at the end of the paper.

View the Counting our Losses Fact Sheet.