New Research Shows Arizona Loses $1.77 Billion in Annual Economic Opportunity Due to Childcare Gaps

34 percent of parents reported childcare issues significantly impacted job changes in their household

The U.S. Chamber of Commerce Foundation this week released a new report examining the impact of childcare challenges on Arizona’s state economy. The report is part of a broader “Untapped Potential” study of five U.S. states that reveals the cost of childcare challenges and opportunities to unlock economic potential for states, employers, and working parents.

The study found that Arizona misses an estimated $1.77 billion annually for the state’s economy, including a $348 million annual loss in tax revenue, due to childcare issues. Additionally, 34% of respondents reported that they or someone in their household has left a job, not taken a job, or greatly changed jobs because of problems with childcare in the last 12 months.

The limited supply of childcare currently does not match high demand, an existing problem made worse by the COVID-19 pandemic. Throughout the pandemic, working parents have struggled to balance work with childcare needs, faced with childcare options that are too far, too expensive, or that do not fit their needs. Meanwhile, childcare providers have fought to stay operational, and employers have dealt with uncertainty about how and when employees could return to work. All of these contributed to the $1.77 billion in lost revenue for Arizona’s economy and an increasing number of employees being forced to leave the workforce.

“In the midst of an increasingly tight labor market, the U.S. Chamber Foundation’s important research shines a light on another complicating factor for employers looking to recruit and retain talent,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “The pandemic has exacerbated childcare challenges that make it harder for parents to participate fully in the economy.” 

Key findings from the 2021 report include:

·         Childcare gaps result in massive economic losses for Arizona. Childcare issues result in a total estimated loss of $1.77 billion in Arizona, including an estimated $348 million lost annually in tax revenue.

·         Some Arizona parents are leaving their jobs due to childcare issues. Approximately 6 percent of parents surveyed voluntarily left a job due to childcare issues.

·         Childcare issues are significantly affecting parents’ job decisions. Of respondents surveyed, 34 percent reported that they or someone in their household has left a job, not taken a job, or greatly changed jobs because of problems with childcare in the last 12 months.

·         The greatest need is for infant and toddler care. Of parents who voluntarily leave their jobs, 55 percent do so when their child(ren) is two years old or younger. 

“While the impact is different in each of these states, these studies show the urgency needed in addressing childcare issues across the country,” said Cheryl Oldham, senior vice president of the U.S. Chamber of Commerce Foundation Center for Education and Workforce. “The challenges in the childcare system are complex, but solvable — and addressing them comprehensively, in ways that consider the needs of parents, businesses, and providers, will be central for the nation’s long-term economic success.”

In 2021, the “Untapped Potential” series is examining these childcare challenges and issues in five U.S. states—Alaska, Arkansas, Arizona, Missouri, and Texas—building on reports released in 2020 on Iowa, Idaho, Mississippi, and Pennsylvania. To access the full reports and other resources, visit:

Diego Píña

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