Understanding Geographic Differences in Child Care Multipliers: Unpacking IMPLAN's Modeling Methodology

Local service sectors including child care have received increasing interest from scholars and policy makers for their role in regional economic development. The IMPLAN input-output modeling system is the most widely used tool to measure the economic importance of the child care sector. Using state-level IMPLAN models for all 50 states and D.C. in the U.S., this paper explores how child care is treated in the IMPLAN system, and how its production functions in state-level models are derived from a national benchmark model. We examine the extent to which such methodology may explain geographic differences in child care multip-liers in addition to other exogenous demographic and child care policy variables. Our analysis facilitates interpretation of geographic differences in child care multipliers in state economies and identifies areas for improvement in modeling methodology.