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Private Childcare Programmes May Not Provide the Best Quality Options for Children

A new Harvard University report for the American Enterprise Institute (AEI) examines issues of quality in for-profit childcare and provides recommendations for improvement.  

Washington, July 2012 -For-profit childcare is a $US20 billion industry that plays a significant role in providing care for the nearly 11 million US children under five in childcare and thus the sector is a crucial one.

Low-income families eligible for federal Child Care and Development Fund subsidies receive vouchers through which they can receive childcare from any legal provider, including for-profits.  Research shows subsidy recipients don’t always receive the highest quality care. Additionally, many middle- or higher-income families are ineligible for income-tested, publicly funded pre-K or Head Start, and instead are left to make their own judgment calls regarding childcare. Since the quality of programmes can be difficult for parents to assess, and state and federal childcare regulations are often lax, those children may wind up with low-quality care that can leave them at an academic disadvantage years down the line.

The AEI report cites a number of innovations that private, for-profit childcare companies can bring to the table. They can help states build capacity and provide more flexible childcare options that are better suited to working parents’ schedules and needs. Still, there is some question as to whether for-profit providers offer the high-quality settings children need to advance their mental and socio-emotional development.

A survey from the National Institute of Child Health and Development used data from the 1990s to review and compare for-profit childcare programmes with non-profit programmes. The non-profits tended to have more markers of quality – for example, higher pay for teachers, smaller class sizes and more positive interactions between caregivers and children – than the for-profit chains.

Moreover, other surveys cited in the report suggest that because parents tend to be more concerned with superficial quality in selecting a childcare centre, for-profit companies place more focus on establishing centres that outwardly appear high quality, rather than on more important (but harder to evaluate) factors like academic content and communication between caregivers and parents.

Given the challenges parents face in identifying the best childcare, the AEI report recommends releasing and marketing information about the quality of various programmes. If families were armed with deeper data and assessments of quality as they select programmes for their children, for-profit centres would see disincentives to emphasizing superficial quality metrics, and might instead compete by improving the actual quality of care.

The report’s second recommendation asks states and the federal government to level the playing field for all providers. According to Todd Grindal, the author of the report, states often decline to regulate small home-based family care settings, which allows those providers to spend less and charge less, skewing the market in their favour.

Additionally, the AEI report says, the US should provide higher childcare subsidies, and ones that match the higher costs of caring for infants than for toddlers or young children. That would allow providers to improve wages (which hover around the poverty level) and give families the opportunity to afford higher-quality care.

In learning more about the for-profit childcare industry, parents and policymakers are at a disadvantage because less information is available. We know for-profit providers often provide lower-quality care, but it is also apparent that they play a critical role in educating and caring for the millions of American children who spend the work week in childcare, but operate outside of publicly-funded and regulated settings. States, as well as the federal government, have an imperative to improve those programmes for the sake of the children they serve.

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