Minneapolis Federal Reserve Bank announces Child Care Capacity report

Late last month, the Federal Reserve Bank of Minneapolis released its Child Care Capacity Report detailing the results of its child care tracking initiative. The report compares Minnesota child care capacity trends with those of other states in the Ninth District, including Northwestern Wisconsin, North Dakota, South Dakota, Montana, and the Upper Peninsula of Michigan. The general takeaway from the report is that demand for child care is trending downward, suggesting that child care availability is likely improving or at least not worsening in many areas. However, the report also outlines how the rapid loss of home-based providers limits options for families seeking more affordable care.

The report shows that the licensed capacity in Minnesota and northwestern Wisconsin has shrunk while the capacity in Montana, North Dakota, and South Dakota has grown. At the same time, the child care demand shrank across the Ninth District. In Minnesota, capacity fell by 3% between 2019 and 2023, and demand shrank by 8% over the same period, leaving the state with a slight uptick in child care slots.

The data also shows a marked decrease in Family Child Care (FCC) across Minnesota, coupled with growth in Child Care Centers (CCC) in the state, which is a consistent trend across the Ninth District. During the 18-year period between 2006 and 2024, Minnesota lost 76,445 FCC child care slots while adding just 58,185 child care slots at CCCs. CCCs were key to backfilling the lost FCC slots, but the loss of FCCs continues to outpace the addition of CCCs, which is a concerning trend.

Click here to read the full report. For questions about child care policy, please contact GMNP Executive Director Darielle Dannen at djdannen@flaherty-hood.com.