Between July 2017 and October 2024, licensed capacity among Granite State child care providers serving children under five dropped by nearly 13%. In September 2024, a New Hampshire child care business census revealed that providers may have been collectively operating at only 85% of their full licensed capacity.
Current and potential Granite State residents with children may struggle to join, or fully engage in, the labor force. According to U.S. Census Bureau data, an average of approximately 17,300 Granite Staters reported being out of the labor force each month of 2024 because they were caring for children who were not in a school or child care setting. Additional estimate averages from August 2023 through August 2024 revealed Granite State parents reported leaving a job (13%), losing a job (7%), not looking for a job (12%), and reducing their work hours (47%) so they could care for their children.
To calculate adverse financial impacts for New Hampshire businesses and state and local tax revenues due to the child care shortage, a recent NHFPI analysis used Bipartisan Policy Center (BPC) methodologies to examine losses in employee productivity due to inadequate child care. This analysis accounted for parents reducing their work hours due to school closures, and productivity losses associated with coordination of alternative child care arrangements during disruptions. Business losses associated with wages and benefits paid to employees while they were on leave or using paid time off were also factored into the calculations. Local and state tax revenue losses were calculated based on family and business impacts.
When BPC model assumptions were tailored to New Hampshire and applied to the most recently available 2023 data, every unavailable child care slot may have cost the state’s economy as much as $35,000 in lost family and business earnings as well as state and local tax revenues. Specifically, businesses may have collectively lost as much as $55.5 million, and up to an additional $14 million may have been lost in state and local tax revenues.
Creating additional, high-quality child care slots to meet the needs of Granite State families with children is a significant endeavor requiring a multi-pronged approach. There is no one-size-fits-all solution, even among counties and municipalities within New Hampshire, and multifaceted solutions will need to be implemented to help make progress toward meeting New Hampshire’s early care and education needs. — NICOLE HELLER/NH FISCAL POLICY INSTITUTE
