Mississippi report: Investing in child care to grow state economy

child care - group of children sitting and posing for a picture

A recent report by a W.K. Kellogg Foundation grantee, the U.S. Chamber of Commerce Foundation, found that Mississippi is losing $673 million annually because of gaps in child care.

The study, “MS Untapped Potential: How Child care Impacts Mississippi’s State Economy,” calls for immediate action from early education advocates, the business community and policymakers to build a stronger state economy. 

The U.S. Chamber of Commerce Foundation partnered with the Mississippi Economic Council and the Children’s Foundation of Mississippi to survey parents on how child care impacts their lives across employment and education. Parents noted that the lack of child care forced them to voluntarily or involuntarily leave their jobs, decrease work hours, reject opportunities to work more hours and to decline new job opportunities. 

Similarly, in education the lack of access to child care caused parents to drop a class or reduce the number of classes they take.

The report calls attention to a key finding: 86% of parents who voluntarily leave their jobs do so when their children are two years old or younger – indicating that child care for infants and toddlers is an area of greatest need. 

Costs may be driving parents out of the workforce since infant and toddler care is often more expensive than care for school-age children. This information may help businesses and policymakers understand when parents are most vulnerable to leave the workforce so that solutions support working parents when they most need it.

The report makes it clear that child care is not just a parent issue – it has statewide economic implications.

Employers lose about $553 million due to worker absenteeism and employee turnover. These costs include lost wages to the absent worker and increased costs to employers in the form of overtime and additional hiring and training costs.

How parents said child care issues impacted their employment, by gender (Percentage)

Notes: Parents could select more than one option. The bar chart is from the report, “MS Untapped Potential: How Childcare Impacts Mississippi’s State Economy.”

Additionally, the report highlights that Mississippi loses $120 million a year in taxes due to child care issues. When parents temporarily leave the workforce due to childcare issues, Mississippi revenues from income tax decrease. Parents may reduce spending as well – which leads to a decrease in sales tax revenue.

The report illustrates that Mississippi can generate substantial economic development by focusing on child care solutions. Similarly, WKKF’s Business Case for Racial Equity in Mississippi report found that while graduation rates have increased in Mississippi, educational achievement gaps remain and educational attainment lags behind employer demand, constraining business and economic growth. The report, published in 2018, projected that by this year 63% of jobs would require some sort of post-secondary education.

The U.S. Chamber of Commerce Foundation recommendations give readers some next steps to pursue, including working with the Mississippi Economic Council, and for employers and elected officials to include childcare in state workforce development planning and in attracting new businesses to the state.

Mississippi is losing $673 million annually because of gaps in child care.

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