Working in Minnesota Report

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Working in Minnesota Report

• By Marcie Jefferys and Elizabeth Davis,
• University of Minnesota
• A report from the Minnesota Child Care Policy
  Research Partnership
• Funding provided by the Minnesota Department of
  Human Services and the Child Care Bureau, U.S.
  Department of Health and Human Services

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Where do Child Care Assistance Recipients Work?

• In which industries are they concentrated, and
  what are the implications of their employment
  patterns for the recipients, employers and
  government?

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Prior Where They Work Studies

• Other states (FL, OR, AL, CA) and earlier Ramsey
  Co. study
• Concentrated in retail trade (esp. grocery stores
  fast food restaurants) and services (esp. temp
  help health care)

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Data

• CCAP recipients SSN matched with wage and hour UI
  data and ES-202 industry classification)
• 8,166 jobs with industry codes
• 7,156 jobs with wage and hour information

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Major CCAP Employing Industries All Four Counties
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CCAP Compared to the Total Workforce
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Results Similar to Other States (SICS)
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CCAP job patterns are related to local economic
needs
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CCAP parents are working in industries with most
job vacancies
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Other Earnings Hours Findings

• CCAP jobs are less than full-time (esp.
  administrative and support, retail trade, and
  accommodation and food services)
• CCAP jobs pay less than FPL (esp. administrative
  and support, retail trade, and accommodation and
  food services)
• Similar across counties

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Average Total Workforce CCAP Weekly Earnings
High Wage
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Average Total Workforce CCAP Weekly Earnings
Low Wage
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Employment Patterns Vary by Type of Child Care
Assistance

• MFIP recipients are most concentrated in three
  low-wage industries admin. support, retail
  trade and accommodation and food services

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Child care provider payments

• Substantial differences across industries in the
  extent to which a dollar invested in child care
  results in earnings.
• Child care payments approximately the same across
  industries
• Earnings vary greatly across industries
• Define payback ratio parent earnings divided
  by CCAP provider payments

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Hennepin County
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I. Conclusions

• 150 M (est.) spent in MN. In 2001 for recipients
  working in four industries
• For some employers, the government is paying
  nearly as much for their employees child care as
  the employers are paying them in wages
• Industries with chronic labor shortages due to
  low wages have the most CCAP-supported employees
• 7,500 (est.) additional workers in state because
  of CCAP
• Unlikely that the size of the CCAP supported
  workforce is enough to exert downward pressure on
  wages

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II. Conclusions

• CCAP recipients are not generally working in jobs
  that will make them less dependent on public
  subsidies over time
• Government investment results in higher payback
  (recipient earnings) in some industries, but this
  data are not tracked by the program
• CCAP is somewhat responsive to local economic
  conditions and may be helping to address a major
  challenge facing the state labor shortages, and
  is less costly than some other economic
  development tools
• CCAP represents a significant public investment,
  but need still is not met

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III. Conclusion

• In both the short and long term, CCAP recipients
  (especially MFIP) will find it more difficult to
  become financially self-sufficient through work
  experience alone.
• Industry personnel practices and internal
  barriers to upper mobility, as well as low-wages,
  challenge their ability to move upward,
  regardless of individual characteristics which
  may effect their employment options.

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Limitations and Contributions

• Cross-sectional, not longitudinal, data
• Data characteristics (e.g., wage and hour data)
• Lack of data on recipient characteristics
• Human capital
• Race, sex, age

• Confirms earlier studies
• Uses NAICS
• Additional analyses (vacancies, payback)
• Relates results to labor market studies in other
  fields

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Suggestions for Future Research

• Examine the cumulative effect of work support
  programs
• Look at trends in child care assistance over
  time, in economic context
• Longitudinal research to determine what factors
  lead to upward movement for recipients
• More research on employers needs and
  perspectives regarding the program