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Economic Development Policy and Local Services: The Case of Child Care

Author: MILDRED E. WARNER and ZHILIN LIU
Published in IJED, Vol. 7 No. 1

Increased attention is being given to the role of local services, such as child care, in economic development. While not considered a driver for growth, we argue such services are a critical component of a balanced economic development strategy. We discuss various perspectives on conceptualizing the role of local service sectors: as exports, as import substitution, as human capital investments and as social infrastructure for the broader economy. We construct input-output models for each of the 50 U.S. states and find linkage effects for these local sectors are similar or higher than other sectors that are more typical targets for economic development policy. We recommend economic development policy include
support for local service sectors such as child care.

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