New report assesses impact of childcare challenges for employers, workers

“Childcare access and affordability issues continue to hold back the Hoosier workforce and future economic growth for our state.”

The Indiana Chamber of Commerce on Tuesday released a new report, in partnership with the U.S. Chamber of Commerce Foundation and Early Learning Indiana, examining the impact of childcare challenges on Indiana’s state economy.

The report is part of a broader “Untapped Potential” study of more than a dozen U.S. states that reveals the related costs and opportunities to unlock economic potential for states, employers and working parents.

The study, supported by research that took place in March, found that Indiana misses an estimated $4.22 billion annually for the state’s economy, including a $1.17 billion annual loss in tax revenue, due to childcare issues. Additionally, 57 percent of parents of young children missed work or class at least once in the surveyed three-month span for childcare-related reasons and 40 percent of parents that experienced such employment disruptions in the prior year reported leaving the workforce as a direct result of childcare-related issues.

Further demonstrating the workforce impact, the report also reveals childcare-related employee turnover and absenteeism costs Indiana employers an estimated $3.05 billion annually.

“Childcare access and affordability issues continue to hold back the Hoosier workforce and future economic growth for our state,” Indiana Chamber President and CEO Vanessa Green Sinders said. “This report brings into focus just how important it is to solve these childcare challenges. While daunting, we see creative solutions emerging across Indiana and we’re confident that through sustained advocacy and collaboration, we can keep making progress to help our citizens and employers.”

Numerous studies have also highlighted the developmental benefits of high-quality childcare for young children. Children given appropriate childcare perform better in school, are less likely to drop out and achieve higher test scores.

“Hundreds of thousands of Hoosier children need high-quality early learning experiences to thrive in school and beyond,” says Maureen Weber, president and CEO of Early Learning Indiana. “For the business community, this report shows a two-fold impact as parents are forced to leave today’s workforce while tomorrow’s workers cannot reach their full potential. We will continue our work with partners in government, business and the philanthropic community to ensure high-quality early learning opportunities for all Indiana children.”

Findings present the issue as multifaceted. Childcare is a central determinant in whether and how reliably a parent can participate in the labor force, a reality that is on full display as the state continues to push for job growth. Indiana ranks 27th in labor force participation relative to other states, and findings indicate many parents may not be able to continue working without adequate childcare options.

The childcare coverage gap in Indiana is also a hindrance to the state’s potential for growth. Indiana has an unemployment rate of 3.5 percent, tying it for 27th among U.S. states, and this analysis shows that childcare issues may be preventing Indiana from maximizing its economic performance.

To view the full report, visit www.indianachamber.com/education.