Childcare in Minnesota: Disrupting the Labor Supply Chain - Part 1
In the U.S., Childcare access and affordability has risen to the fore of policy priorities in recent years, and Minnesota is no exception. Childcare is expensive, sometime prohibitively so, and inaccessible for too many Minnesotans. While the data suggests that childcare affordability and availability is most concerning in greater Minnesota, the metro area too experiences what is known as “childcare deserts”. This term describes a geographical area which has either too few childcare providers for the number of children, providers being too distant from families, or a combination of both.
Among economic development professionals, child care has become an area of focus due to its impact on the labor supply. This has been particularly pronounced at a time with record low unemployment rates, and businesses are having difficulty filling positions and expanding. Baby-boomers and workers over 55 have not returned wholly to the workforce post-Covid, as evidenced by the labor force participation rate for each age cohort. The labor force participation rate for “prime-age” workers, 25-54 has recovered back to its pre-pandemic levels, but this is not enough to offset the mass exodus of 55+ workers from the labor force. To remedy this, we need to either:
Convince 55+ workers to reenter the workforce, which may be challenging if they have made the decision to retire; or,
Find ways to increase the number of “prime age” workers in the labor force.
Even if we were able to convince large numbers of retirees to reenter the workforce, it would still only provide a temporary band-aid to what is a systemic problem. 55+ workers reentering the labor force would at best relieve the worst of the labor shortage for a handful of years. Providing solutions and incentives for prime-age Minnesotans to enter the workforce is a more permanent, sustainable approach. If someone aged 35 can be compelled to enter the workforce, there are potentially 30 additional years for which they can contribute to the economy.
This is where the issue of childcare intersects with the labor supply. Because prime-age workers are the age cohort most likely to have small children, this group suffers the greatest from the lack of availability and affordability of childcare. It is simply not reasonable to expect that a person, who currently cares for a child full time, to enter the workforce while having their income wholly consumed by child care costs. This scenario doesn’t account for areas in which proximity to childcare is prohibitive. Travelling 30 minutes each way before work to bring your child to childcare, and then again after work adds another disincentive where affordability is already an issue.
The ripple effect of this extends to other areas of the economy as well. Businesses will not locate a new office or store in areas which there is no labor supply. Families will not move to an area if there are no new job opportunities(or child care). This creates a negative feedback loop which requires intervention.
To begin, we need to accurately define the problem. Some work has already been done on this, like this map at Childcaredeserts.org. It indexes scarcity of child care availability, and overlays poverty metrics geographically.
For our part, we wanted to use updated census and provider data, and visualize the areas of Minnesota which are in most need of childcare. According to the most recent Census estimate, there are approximately 348,000 children under the age of 5 in Minnesota. The Census also estimated roughly 369,000 children aged 5-9. If we add these two age cohorts together we get 717,000 Minnesotans under the age of 10. According to MN DHS, there were approximately 9500 licensed child care providers in Minnesota as of 2021. A quick calculation shows that Minnesota has about 1 child care provider for every 75 children under 10 years old. This is of course an absurdly high ratio, but fortunately for children aged 5-9, school will stand in place of childcare for the majority of the year, excluding summers. If we include only children aged 0-4, the ratio drops to 1 provider for every 36 children. This is still an untennable ratio. To develop good policy solutions, we need to make sure we ask the right question. We could ask either:
How can we meet the childcare needs of the greatest amount of Minnesotans?; or,
How can we meet the childcare needs in the areas which need it the most?
We have begun by trying to answer question 2 - “Which areas in Minnesota have the greatest need of childcare currently?”
To start, we have defined “need” by those census tracts which have the highest amount of children aged 0-4, and the fewest childcare providers within that tract. Figure 1 below depicts that relationship within the metro area.
Figure 1 - Population under 5yrs and number of childcare providers.
Using the color tile legend on left, we can see that the bright orange areas represent the census tracts which have the largest 0-4 age population while also having the least childcare facilities. Conversely, the bright blue tracts are those with the largest number of childcare providers and lowest population under 5yrs. Figure 2 below shows the same function, but for greater NW Minnesota.
Figure 2
The purpose of this mapping exercise is to identify the areas of Minnesota which should be addressed first, based on the 0-4 population and childcare provider availability and proximity. From a policy perspective, these areas likely will benefit the most from subsidy or grant programs intended to establish new facilities. We should note at this point that more research is needed, and these geo-spatial trends are simply a starting point.
For example, figure 3 below shows Faribault in southern MN and the surrounding area. The highlighted tract in Faribault indicates that there are 7 childcare facilities with a 0-4 population of 169. This is a relatively good ratio of 24 children per facility - much lower than the state average. We see however that the area immediately to the east and southeast are orange, indicating a dearth of providers. It is likely the case that parents in many of the surrounding rural areas are utilizing providers within the Faribault tract. What is unknown is how far these families are commuting for childcare, or whether it is feasible for them to access providers in Faribault at all. The next step in this analysis would be to gather local data to determine the “commuting area” surrounding each provider. This would support the general mapped trends, as well as provide more spatial detail of the areas needing the most care.
Figure 3