Child care is such an important industry to New York state -- generating billions of dollars, thousands of jobs and allowing hundreds of thousands of parents to work -- that it should be part of the state's economic development strategy, a new report from a Cornell University researcher recommends.

The child-care industry deserves economic-development incentives to not only promote school readiness among children but also to boost local and regional economies, says Mildred Warner, an associate professor of city and regional planning at Cornell. She is the primary author of the new report, "Investing in New York: An Economic Analysis of the Early Care and Education Sector," published this month by the New York State Child Care Coordinating Council, a nonprofit group of 42 organizations that provide child-care resource and referral services to businesses and parents.

"To most consumers, taxpayers and political leaders, child care represents a vital service for families and social and cognitive development for children," says Warner. "But child care is also an important building block of the New York state economy. New York's child-care industry supports businesses and workers and contributes to economic activity. A high-quality child-care system, just like roads and bridges, is part of the infrastructure for economic development."

Warner reports that the child-care industry in New York generates $4.7 billion annually, including $3.64 billion in fees paid by parents and more than $1 billion in direct state and federal funding to providers. It also employs some 119,000 people, which is more than the hotel and lodging industry and more than the combined dairy industries.

"Yet those 119,000 employees earn only about one-third what kindergarten teachers earn and less than what an average retail salesperson earns," says Warner. "It's no wonder that employee turnover in the child-care sector is 30 percent a year."

The report looks at child care and its linkage to the broader regional and state economy. Warner also has conducted similar studies for Long Island, Kansas and Massachusetts and has

provided technical assistance to many other states. "To date, more than 50 states and localities have done similar studies -- many following Cornell's lead," says Warner. The studies seek to reframe child care as part of economic development, beyond its human development and educational impacts, which already are well-known.

The Cornell research team has developed a methodology to measure the regional economic importance of early care and education.

Because the child-care industry is a significant small-business sector of the New York state economy, Warner asserts that it should receive more intense economic-development attention. With more than 22,000 regulated child-care businesses serving 620,000 children, child care supports an estimated 750,000 working parents. Based on the average statewide salary of $40,658, those parents earn a combined $30.5 billion per year that fuels the state economy through productivity and consumption, Warner points out.

Furthermore, according to the study, each new state or local dollar spent on child care in New York stimulates $1.52 in state economic activity, and each federal dollar spent generates more than $2. Each job created by increased local demand for child care generates a total of 1.26 jobs in the broader state economy, and each additional job created by an increase in external demand for child care generates a total of 1.5 jobs.

"With child care so important to the economy and well-being of families, it should receive more investment," says Warner. "Investment in child care will benefit the state's economy, support businesses and workers, improve the quality of life in our communities and prepare our future workforce."

She offers a host of recommendations, from applying traditional economic-development strategies, such as tax credits and tax abatements to businesses for creating on-site child care or subsidizing employee child-care costs, raising how much parents can set aside in pre-tax earnings for child care costs, and providing financial rewards to child-care employees who stay on the job.

"Investing in affordable, high-quality early care and education programs should be a priority for New York," says Carol Saginaw, executive director of the Child Care Coordinating Council. "The dividends will appear almost immediately, while the impact will continue long term."

The research is supported, in part, by the U.S. Department of Health and Human Services' Administration for Children and Families, the U.S. Department of Agriculture, and the Rauch and Kellogg Foundations.