First Five Nebraska recently released a report that said inadequate access to child care costs Nebraska families, businesses and state tax revenues nearly $745 million annually in direct losses.
“The Bottom Line: Economic impacts of inadequate child care access in Nebraska’’ explores how gaps in child care availability affect family income, employer profitability and state revenue, based on research conducted by the University of Nebraska-Lincoln’s Bureau of Business Research.
With nearly 75% of Nebraska children in some type of care while their parents work, early childhood programs are crucial to the state’s economy.
“The report’s findings boil down to a simple conclusion: Inadequate child care is a serious barrier for improving family incomes, the bottom line of businesses and the economic growth of our state,” said Jason Prokop, director of First Five Nebraska, an early childhood policy and research organization. “To support the economic vitality of Nebraska families, businesses and our economy, it is imperative that parents, local stakeholders, employers and government come together to create effective, community-driven solutions that strengthen Nebraska’s early childhood infrastructure.”
Eric Thompson, director of the Bureau of Business Research and a principal investigator for The Bottom Line, believes the report can offer valuable insight in the ongoing conversation about child care as an economic driver in Nebraska.
Key findings show that gaps in child care availability:
- Cost Nebraska families up to $489 million a year in direct losses to household income from missed work and reduced hours. In some cases, working parents may forgo opportunities for higher-paying positions or may even leave the workforce entirely.
- Cost Nebraska businesses more than $234 million in direct losses annually due to decreased productivity and higher employee turnover.
- Reduce Nebraska tax revenues by $21 million each year.
“Nebraska’s businesses have been working with community partners to close the gap in available child care beginning well before the pandemic,” said Bryan Slone, president of the Nebraska Chamber of Commerce & Industry. “But the consequences of COVID-19 may now have once again widened that gap, preventing parents from entering or returning to the workforce. Simply put, if parents don’t have a place they can trust to care for their kids, they will not be able to fully contribute to the critical need to re-energize and strengthen our state’s economy coming out of the pandemic.”
The report also shows how direct losses due to child care gaps are multiplied throughout the economy. As families lose income, they tighten their belts and reduce spending. This reduces profit for businesses and lowers tax revenue for Nebraska.
The combined direct and multiplied losses of inadequate child care costs Nebraskans about $639 million in income, $731 million in business output and $26 million in income tax revenues each year. Reduced economic activity due to child care gaps also decreases employment opportunity, costing the state an estimated 3,337 jobs per year.
First Five Nebraska’s new “My Nebraska Story’’ awareness campaign spotlights working parents, employers, child care providers and other stakeholders in 11 Nebraska communities statewide. Information and resources can be found at ourstoryne.org.