The Childcare Industry in New England
As part of the GRI Whitepaper Series, GRI has released 10 Special Investigation Reports supported by the Federal Emergency Management Agency (FEMA). These reports bring together analysis and policy recommendations in cross-cutting critical areas including municipal and state budgets, housing, food, healthcare, K-12 education, childcare, higher education, small business, energy, and fisheries. Each sector-specific report was authored by subject matter experts of these areas from GRI’s Northeastern Faculty Affiliates and Massachusetts Institute of Technology’s Lincoln Laboratory, providing an in-depth, accessible review of the challenges, opportunities and actionable policy considerations in each area facing the COVID-19 crisis.
The COVID19 pandemic resulted in an unprecedented shock to childcare arrangements—both formal and informal—most notably with the abrupt closure of daycares and schools in March 2020. At the beginning of the summer, many daycares and summer camps still had not re-opened due to the challenges of complying with state-imposed restrictions. Given that daycares already operate on slim profit margins, these restrictions mean either steep increases in tuition for families or going out of business. In addition, parents are left wondering if informal or unpaid caregiving arrangements with relatives, such as grandparents, are safe—particularly in states with high and/or resurging COVID-19 caseloads. In New England, the childcare industry is an important part of the regional economy. As of 2017, the industry produced $3.1 million in revenue in 2017 and employed over 80,000 workers ranging from 5,229 in Rhode Island to 39,107 in Massachusetts. Total earnings across all six states summed to $1.7 million in 2017 with earnings per worker ranging from $17,411 in Maine to $22,768 in Massachusetts. This 1.7 million in direct earnings in New England is estimated to produce an additional $1 million in indirect and induced earnings throughout the region.Moreover, New England’s rate of childcare usage is above the U.S. average (53.9%) in all six New England states, ranging from a low of 55.0% in Rhode Island to 69.7% in Massachusetts.