Author: Raahi Reddy, Principal
Since our founding in 2011, Estolano Advisors (EA) has worked at the leading edge of inclusive economic development — partnering with governments, communities, workers, and employers to build more just and equitable local economies. For more than a decade, that work has taken many forms: facilitating community benefits agreements, developing regional economic development strategies, researching workforce pathways for a just transition, supporting small business and startup ecosystems, and managing multi-stakeholder processes to expand access and opportunity for women and people of color across industries and trades. In each engagement, we have followed the same conviction: that economic development done well must reach everyone, and that the field advances when practitioners are willing to name and address the structural barriers that keep it from doing so.
That conviction is what brings us to child care. Across our current work with cities, counties, and regional economic development organizations, a consistent and consequential gap has emerged — communities are investing in growth while leaving out the care infrastructure that makes that growth accessible to the working families who power it. Child care is not a social service at the margins of economic development. It is infrastructure, as foundational to a thriving local economy as roads, broadband, or housing. Until economic development practitioners treat it that way, we will continue constraining our own potential.
An Evolving Field with an Unfinished Agenda
The economic development field has been reshaped by decades of hard lessons. The traditional model — build the roads, attract businesses, create jobs, benefits trickle down — has proven that there needs to be more. What we were left wanting is a more effective and, equity-centered practice: identifying sectors with the potential to deliver quality jobs; deploying the full toolkit of incentives, capital, land, and regulatory reform; and building intentional pathways so that historically excluded workers — women, workers of color, immigrants, and low-income communities — gain real access to careers and economic mobility.
That evolution took decades of persistent advocacy, research, and practice. It is now time to apply the same evolved lens to child care — a sector that fundamentally shapes who can participate in the economy we are working to build.
The Evidence Is Clear
Child care deserts — communities where licensed supply cannot meet demand — cover more than half of the United States. The cost of full-time care rivals college tuition in most states. Child care is now one of the largest, most unavoidable household expenses, competing directly with housing and food costs. And child care providers operate at bare minimum margins themselves, and the workforce that delivers care is among the lowest paid in the economy, producing chronic instability and turnover. The market has failed to solve this, and individual family workarounds are not scalable solutions. The economics of child care are broken by design. Raising tuition doesn't solve it; most families are already at their limit, and local markets have a ceiling. Child care is priced like a private consumer service but functions like a public infrastructure, in the same way we don’t expect every individual business to build its own roads or electric grid. This mismatch is precisely why no individual solution has ever worked, and why public investment is not generosity. It is economic logic.
But the scale of the crisis is deeper than ever, directly impacting our ability to build economic opportunities across communities.
Our research across multiple regions and sectors demonstrates the economic consequences directly:
One national study found that the nation’s child care crisis costs parents and businesses $172 billion in lost earnings, productivity, and revenue every year.
In EA’s research on workforce disparities for women in construction in the LA metro area, we found that both women and men were more likely to drop out of apprenticeships if they had a young child at home.
In EA’s work with rural communities in New York State — engaging local employers and economic development planners — we are already seeing how the lack of child care is driving an exodus of 25-to-35-year-olds from the region and making it harder to attract workers to their tourism, healthcare, and manufacturing sectors. These are growing industries, ripe for economic expansion — but child care, alongside the lack of housing, is keeping a heavy lid on that opportunity.
Rising costs and return-to-office mandates have also lowered labor force participation for mothers – in a survey of women who left the workforce in 2025, 42% cited caregiving costs, and between January and June 2025, the labor force participation of moms ages 25 to 44 dropped 3 percentage points.
These are not outliers. They reflect a systemic failure to account for care in how we plan for workforce participation, sector growth, and regional prosperity.
The Infrastructure Gap We Keep Ignoring
When economic development practitioners identify a sector as a priority, they know how to mobilize.. Economic development practitioners have long maintained a robust toolkit for growing and sustaining businesses in their communities. They leverage the variety of economic development tools available – financial, land and real estate, regulatory – and invest in business retention and expansion and workforce partnerships. Each of these tools was developed for the challenge of building economic sectors that markets underserve.
Child care meets that definition in almost every community in the United States. Providers need accessible capital to expand capacity and weather thin margins. They face zoning and permitting barriers that make it harder to site facilities where working families need them most. They are small, family-owned businesses that benefit enormously from the kind of sustained, relationship-based outreach that these programs provide. Their workforce faces a chronic wage gap that sector partnerships and workforce investment can begin to address. And the employers who depend on a care-stable workforce have every incentive to become partners in solving the problem — when someone brokers that conversation.
What is missing is not the tools. It is the institutional will to recognize child care as an economic development problem in the first place.
A Spectrum of Actions
It is important to be clear about what local economic development strategies can and cannot accomplish. The child care crisis is structural, and solving it fully requires deep and sustained public investment at the state and federal levels — to adequately fund the system, stabilize provider economics, and raise wages for a workforce that has been chronically undercompensated. Local strategies alone will not close that gap. But the spectrum of action is not binary — not "the state fixes it or nothing changes."
Local economic development actors have a genuine and largely untapped role to play in moving communities along the path toward a fully funded, accessible child care system, alleviating some of the most immediate burdens while the larger policy fights are waged. Beyond the financing and workforce tools described above, communities have additional levers available today: development linkage fees that require commercial and residential developers to contribute to child care infrastructure as a condition of approval; inclusionary incentives for developers to site child care facilities within new mixed-use and residential developments; and design standards that ensure new housing — particularly ground-floor units in multifamily buildings — can accommodate licensed family child care providers. None of these are silver bullets. Together, they represent a meaningful local commitment to a shared problem. The responsibility for child care does not belong solely to families, solely to providers, or solely to state legislatures. It belongs to all of us — and there is far more that local communities can do, right now, than most are doing.
What Leadership Looks Like
A growing number of economic development organizations are beginning to integrate child care into their regional strategies — and the results are instructive. In addition to our work developing a rural child care model in the North Country of New York State:
Our work on the Disparity Study with LA Metro led to a broader roundtable about workforce and child care strategies with other regional agencies, building trades and contractors.
We are currently developing toolkits and strategic actions for counties and cities focused on leveraging planning, permitting, and development processes to expand child care capacity with the goal of creating a replicable model that other jurisdictions can adopt to incentivize child care facility development and strengthen support for child care providers. We developed a toolkit for employers in partnership with Child Care for Every Family Network to CHIPS Incentives Program applicants and recipients to ensure effective, inclusive, and compliant child care plans.
Our work with communities demonstrates that when child care is treated as a sector investment rather than a family’s private challenge, outcomes improve: stronger workforce participation, lower turnover in targeted industries, and greater economic access for workers who have historically been left out.
Economic development practitioners are uniquely positioned to move this issue forward. We sit at the table when workforce plans are written, sector strategies are established, and public capital is deployed. We are the ones employers come to when they cannot find or retain workers. Increasingly, child care is the answer to questions we are already being asked.
Housing took decades to be understood as a collective economic challenge requiring public investment and policy intervention at scale. Child care cannot wait that long. The workforce is here. The jobs are being created. What is missing is the care infrastructure that allows people to show up for both.
Unless we start treating child care as an economic development driver — not a private burden — we will continue forcing families and providers to bear sole responsibility for the infrastructure our entire economy depends on. We will continue building growth strategies that the working families powering our economies simply cannot access.
Our field must evolve — and it will. Child care is not a footnote to economic development; it is a foundational investment in our economic future. The communities that recognize this first will be the ones that thrive. Join us on this journey.
Stay tuned for more insights from Raahi about her work developing child care strategies for rural communities in upstate New York.
For our 15th anniversary, EA’s leadership will be reflecting on the ideas, challenges, and shifts that have defined their work across climate resilience, equitable economic development, mobility justice, and beyond. These think pieces represent the expertise that our team has cultivated over the past decade and a half of project work. Follow us on LinkedIn to see the upcoming insights as they’re released.