Inadequate child care costs Indiana nearly $1.1 billion annually

The Public Policy Institute and Early Learning Indiana brought together representatives from across the state to convene the Economic Impact of Early Care and Education Research Project Advisory Board in 2018. PPI conducted research to assess economic repercussions on the state and businesses resulting from child care related work disruptions (i.e. absenteeism and employee turnover). Estimates were calculated for the state, three urban counties, and three rural counties. After reviewing the research and possible funding models, the advisory board made recommendations for funding voluntary early care and education in Indiana.

Lack of early care and education has demonstrable effects on Indiana’s economy. We estimated that Indiana loses nearly $1.1 billion in economic activity every year due to child care related absenteeism ($580.7 million) and turnover ($519 million).

Absences and turnover cost the rural and urban counties substantially. The three rural economies were estimated to lose $2.1 million (Parke), $4.9 million (Montgomery), and $7.5 million (Jackson) in annual economic activity, while the three urban economies lost an estimated $28.9 million (Vanderburgh), $35.3 million (Elkhart), and $138 million (Marion) annually. Businesses in rural counties lose up to $12.1 million while urban counties lose $221.8 million annually.

Annual opportunity costs of lack of early care and education

$1.1 billionLost in statewide economic activity

$119 millionLost in statewide tax revenue

$1.8 billionDirect cost to Indiana employers