Child Care Sector Packs a Big Economic Punch: Contributes $152 Billion

Affordable and accessible child care continues to be an economic force multiplier—helping parents stay in the labor force, reducing poverty rates, and spurring direct and indirect spending. The organized child care sector in 2022 generated a total economic impact of $152 billion and supported 2.2 million jobs.

That’s according to a new report from the Committee for Economic Development (CED), the public policy center of The Conference Board. The report examines the broader economic and workforce development policy roles of the paid child care sector, including a state-level analysis of child care’s impact.

The study finds the child care industry generated a record $68.5 billion in revenue in 2022 while directly employing over 1.5 million workers. The sector's economic activity triggered an additional $83.8 billion in indirect and induced output across other industries. This means that each dollar of direct revenue produced by the child care sector supports an additional $1.22 in output in other industry sectors nationwide.  

When parents have access to affordable child care, they’re more likely to participate in the labor force, spurring regional economic growth. For policymakers, the findings suggest that child care is a critical component of any effort to increase labor force participation, boost educational attainment, and create economic growth.

"The data presents a compelling case for viewing child care as critical economic infrastructure," said Cindy Cisneros, Vice President, Education Programs, CED. "States with better child care access show higher workforce participation, higher household incomes, and lower poverty rates—demonstrating that investments in child care yield significant returns for both families and the broader economy."

The report, Child Care in State Economies—Part 3, is the third in a three-part series produced with the support of a grant from the W.K. Kellogg Foundation. The series includes data and fact sheets specific to each state. 

Key findings from the report include:

The child care sector continues to make substantial economic contributions to the US economy.

• In 2022, over 1.5 million sole proprietors and wage and salary workers were employed directly within the child care sector.
• Workers in the sector earned $32.7 billion in wages, salary, and self-employment income.
• The industry also generated $24.1 billion in purchases of goods and services, supporting economic activity across other sectors.
• The organized child care sector in 2022 generated a total economic impact of $152 billion and supported 2.2 million jobs.

economic activity across other sectors.

• The organized child care sector in 2022 generated a total economic impact of $152 billion and supported 2.2 million jobs.

Child care remains crucial for workforce participation and development.

• More than 12% of young children lived in households where child care challenges created significant job disruptions for parents in 2022.
• Access to affordable child care is particularly critical for enabling maternal workforce participation.
• Child care supports both increased labor force participation and the pursuit of additional education and training.

State-level analysis reveals significant economic variation:

• States with higher labor force participation rates show consistently lower poverty rates.
• Households in these states earn, on average, $30,000 more annually than those in the lowest labor force participation states, even after adjusting for cost of living.
• States with the lowest levels of educational attainment and labor force participation tend to have the lowest percentages of children in paid child care.

Policymakers should consider child care's role in economic development:

• Child care should be recognized as essential economic infrastructure.
• The primary economic function of making child care more accessible is to enable greater workforce participation, particularly among mothers with young children.
• Increasing labor force participation can generate significant economic effects, including higher income per capita and reduced rates of poverty.

The complete report can be found here.

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead^®. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501(c)(3) tax-exempt status in the United States. ConferenceBoard.org

The Committee for Economic Development (CED) is the public policy center of The Conference Board. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nation’s interest. CED Trustees are chief executive officers and key executives of leading US companies who bring their unique experience to address today’s pressing policy issues. Collectively, they represent 30+ industries and over 4 million employees. ConferenceBoard.org/us/Committee-Economic-Development