Unequal access: Hidden barriers to achieving both quality and profit in early care and education


Children play in the playground area at the Frederick, Maryland Head Start facility March 13, 2012.

Article Highlights

  • More than 62 percent of US children under 5 years old are regularly cared for by someone other than a parent.

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  • Structure of early childhood education market makes it hard for for-profits to compete, sometimes leading to sacrificed quality of care.

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  • Caregivers of young children are on average paid at slightly lower rates than parking lot attendants and animal caretakers.

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Unequal access: Hidden barriers to achieving both quality and profit in early care and education

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Executive Summary

Today, more than 12 million (or 62 percent of) US children under five years old are regularly cared for by someone other than a parent. From a policy perspective, early care and education programs for children from birth to age five serve two broad purposes: they help children develop in ways that support the skills and habits of mind essential to later school achievement and economic success, and they facilitate parents’ participation in the workforce by providing care for children during business hours. Public-sector entities such as public schools and state prekindergarten programs are often able to meet the first of these purposes. Yet, public-sector programs are often less able to meet parents’ employment-related child care needs, and these programs often do not have the capacity to serve the millions of families of children three years old and younger.

Private enterprise is critical to filling these gaps. For-profit early childhood education (ECE) programs rapidly adapt to the employment-related needs of families by offering extended hours or convenient work-site locations, and provide much-needed access to care for parents who work outside the home—particularly for parents with children under age three and those who work nonstandard hours. Yet, the for-profit model may fall short in preparing children for school success. To maximize the potential of private enterprises to support the needs of young children and their families, parents must be given the tools to better observe the most important elements of program quality. Moreover, public policies must provide all programs—public, for-profit, and private nonprofit alike—with equitable levels of oversight and support.

Bridges and Barriers: Private Enterprise and the Expansion of Public Early Care and Education. The low level of regulations for informal care combined with the increasing number of public schools and state prekindergarten programs offering free and reduced-cost options for three- and four-year-old children has the potential to squeeze for-profit providers out of the market. On the one hand, it is difficult for formal for-profit centers to compete with free or reduced-cost public options for four-year-olds. On the other hand, it is difficult for formal for-profit centers to compete with low-cost, unregulated, informal home-based providers for younger children. In the current child care marketplace, for-profit programs therefore seem to have two basic choices: (1) they can forgo public funding and compete directly with the public-sector programs by providing an alternative product, or (2) they can partner with the public sector to provide publicly funded care to young children.

Information Asymmetry: Can Parents Accurately Assess a Program’s Quality? The early care and education marketplace provides a unique look at the benefits and challenges of permitting private enterprise to participate in the delivery of public education. Through innovative strategies—such as partnering with employers to create on-site programs, experimenting with unique pedagogical approaches, and providing flexible programming to meet the changing needs of families—for-profit entities have provided parents with the choice and flexibility to manage their professional and family lives. Yet, because parents are often unable to effectively discern program quality, some providers may not invest in some essential but disguised elements of program quality.

Moving Forward: Recommendations for Policy and Practice. Policymakers should take two steps to help promote quality among all providers in the early child care space. First, they can provide parents with a clearer picture of program quality through quality ratings systems (QRS), which can be connected to systems of tiered reimbursement by which programs that receive public funds are paid at higher rates for demonstrating higher scores on QRS indicators. By providing child care programs with clear financial incentives to improve quality and by helping parents become more informed consumers, QRS will encourage providers of all types to focus on the aspects of program quality most important for children’s health and development.

Second, policymakers should provide equitable oversight and support for all caregivers of infants and toddlers. State oversight of formal and informal early care and education programs is often uneven. This regulation imbalance between large and small providers allows some home-based providers to operate at lower costs than formal providers and jeopardizes the healthy development of children in these lower-cost, lower-quality programs. This bias toward small providers makes it difficult for successful, innovative, for-profit providers to grow their programs to serve a larger number of children and to maintain quality of care. Child care regulations provide important safeguards for young children and have far-reaching implications for children’s development. States should therefore work to apply uniform standards to all those who care for children, regardless of program auspice or size.

Todd Grindal ([email protected]) is a doctoral candidate at the Harvard Graduate School of Education.

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