Transforming the
Financing of Early Care
and Education
Committee on Financing Early Care and Education
with a Highly Qualified Workforce
La Rue Allen and Emily P. Backes, Editors
Board on Children, Youth, and Families
Division of Behavioral and Social Sciences and Education
Health and Medicine Division
A Consensus Study Report of
THE NATIONAL ACADEMIES PRESS
Washington, DC
www.nap.edu
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This activity was supported by contracts between the National Academy of Sciences and the Alliance for Early Success (G-1605-01115); the Bill & Melinda Gates Foundation (OPP1153016); the Buffett Early Childhood Fund; the Caplan Foundation for Early Childhood (10002673); the Foundation for Child Development (NAS-02-2016); the Heising-Simons Foundation (2016-210); the Kresge Foundation (R-1604-259389); the U.S. Department of Education (ED-ESE-16-C-0018); the U.S. Department of Health and Human Services Administration for Children and Families (HHSP233201400020B, Order No. HHSP23337046); and with additional support from the Bruce Alberts Fund, the Cecil and Ida Green Fund, and the W.K. Kellogg Foundation Fund (P3034414). Any opinions, findings, conclusions, or recommendations expressed in this publication do not necessarily reflect the views of any organization or agency that provided support for the project.
International Standard Book Number-13: 978-0-309-47040-7
International Standard Book Number-10: 0-309-47040-4
Digital Object Identifier: https://doi.org/10.17226/24984
Library of Congress Control Number: 2018941717
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Suggested citation: National Academies of Sciences, Engineering, and Medicine. (2018). Transforming the Financing of Early Care and Education. Washington, DC: The National Academies Press. doi: https://doi.org/10.17226/24984.
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COMMITTEE ON FINANCING EARLY CARE AND EDUCATION WITH A HIGHLY QUALIFIED WORKFORCE
LA RUE ALLEN (Chair), Steinhardt School of Culture, Education, and Human Development, New York University
CELIA C. AYALA, Los Angeles Universal Preschool/Child 360
DAPHNA BASSOK, Curry School of Education and EdPolicy Works, University of Virginia
RICHARD N. BRANDON, Human Services Policy Center, University of Washington (retired)
GERALD M. CUTTS, First Children’s Finance
KIM DANCY, Education Policy Program, New America
ELIZABETH E. DAVIS, Department of Applied Economics, University of Minnesota
HARRIET DICHTER, Early Education Services, ICF and Early Childhood Policy and Strategy Consultant
KATHY GLAZER, Virginia Early Childhood Foundation
LYNN A. KAROLY, RAND Corporation
HELEN F. LADD, Sanford School of Public Policy, Duke University (emeritus)
SHAYNE SPAULDING, Income and Benefits Policy Center, Urban Institute
MARCY WHITEBOOK, Center for the Study of Child Care Employment, University of California, Berkeley
SHEILA MOATS, Costudy Director
EMILY P. BACKES, Costudy Director
SARAH TRACEY, Associate Program Officer (July through November 2016)
MARY GHITELMAN, Senior Program Assistant
LESLEY WEBB, Program Assistant (from January 2018)
EMILY BYERS, Christine Mirzayan Science and Technology Policy Graduate Fellow (January through May 2017)
BOARD ON CHILDREN YOUTH AND FAMILIES
ANGELA DIAZ, (Chair), Departments of Pediatrics and Preventive Medicine, Icahn School of Medicine at Mount Sinai
HAROLYN BELCHER, Kennedy Krieger Institute and Johns Hopkins University School of Medicine
W. THOMAS BOYCE, Division of Developmental Medicine, University of California, San Francisco
DAVID V.B. BRITT, Sesame Workshop (retired CEO)
RICHARD F. CATALANO, University of Washington School of Social Work
DEBBIE I. CHANG, Nemours, Policy and Prevention
DIMITRI CHRISTAKIS, Seattle Children’s Research Institute, University of Washington
PATRICK H. DELEON, F. Edward Hebert School of Medicine and the Graduate School of Nursing Uniformed Services, University of the Health Sciences
ELENA FUENTES-AFFLICK, University of California, San Francisco, and San Francisco General Hospital
EUGENE E. GARCÍA, Mary Lou Fulton Teachers’ College, Arizona State University (emeritus)
JEFFREY W. HUTCHINSON, F. Edward Hébert School of Medicine, Uniformed Services University of the Health Sciences
JACQUELINE JONES, Foundation for Child Development
JAMES M. PERRIN, Harvard Medical School and MassGeneral Hospital for Children
MARTIN J. SEPÚLVEDA, Research Division, IBM Corporation (retired)
MARTIN H. TEICHER, Harvard Medical School and McLean Hospital
JONATHAN TODRES, Georgia State University College of Law
NATACHA BLAIN, Director
PAMELLA ATAYI, Program Coordinator
Acknowledgments
The Alliance for Early Success; the Bill & Melinda Gates Foundation; the Buffett Early Childhood Fund; the Caplan Foundation for Early Childhood; the Foundation for Child Development; the Heising-Simons Foundation; the Kresge Foundation; the U.S. Department of Education; and the U.S. Department of Health and Human Services Administration for Children and Families asked the Board on Children, Youth, and Families of the National Academies of Sciences, Engineering, and Medicine to outline a framework for a funding strategy that would provide reliable, accessible high-quality early care and education for young children from birth to kindergarten entry, including a highly qualified and adequately compensated workforce consistent with the vision outlined in the 2015 Institute of Medicine and National Research Council report, Transforming the Workforce for Children Birth Through Age 8: A Unifying Foundation. The National Academies appointed the Committee on Financing Early Care and Education with a Highly Qualified Workforce. In addition to the sponsors listed above, the committee also acknowledges the Bruce Alberts Fund, the Cecil and Ida Green Fund, and the W.K. Kellogg Foundation Fund for funding our work.
Many individuals volunteered significant time and effort to address and educate the committee during our public information meetings. Their willingness to share their perspectives and experiences was essential to the committee’s work. We thank Linda K. Smith, formerly Administration for Children and Families; Libby Doggett, formerly U.S. Department of Education; Helene Stebbins, Alliance for Early Success; Jacqueline Jones, Foundation for Child Development; Patricia Lozano, formerly Bill &
Melinda Gates Foundation; Neesha Modi, Kresge Foundation; Rebecca Gomez, Heising-Simons Foundation; W. Clayton Burch, West Virginia Department of Education; Ellen Frede, Building Effective Early Learning Systems; Barbara Thompson, formerly U.S. Department of Defense; Valora Washington, Council for Professional Recognition; Bill Ermatinger, Huntington Ingalls Industries; Ellen Galinsky, Families and Work Institute and Society for Human Resource Management; Tom Lamb, PNC; Amy K. Matsui, National Women’s Law Center; Sandy Baum, Urban Institute; Carole Roan Gresenz, RAND Corporation; Alanna McCargo, Urban Institute; Nancy Hylden, Hylden Advocacy & Law; Katherine Klem, Institute for Child Success; Nasha Patel, Louisiana Department of Education; Simon Workman, Center for American Progress; and Anne W. Mitchell, Early Childhood Policy Research and Alliance for Early Childhood Finance. We also thank the many other stakeholders who shared information with the committee over the course of the study.
This report would not have been possible without the contributions of many people. Special thanks go to the members of the committee, who dedicated extensive time, thought, and energy to the drafting of the report. Several members of the staff of the National Academies made significant contributions to the report. Mary Ghitelman provided key administrative and logistical support and made sure that committee meetings ran smoothly. Lesley Webb provided administrative support for report dissemination and production. Tara Mainero and Sarah Tracey assisted with committee formation. Thanks are also due to Emily Byers, who contributed important research assistance to the committee’s work. The committee is also grateful to Lisa Alston and Pamella Atayi for their administrative and financial assistance on this project. From the Division of Behavioral and Social Sciences and Education Office of Reports and Communication, Eugenia Grohman, Viola Horek, Patricia L. Morison, Kirsten Sampson-Snyder, Douglas Sprunger, and Yvonne Wise shepherded the report through the review and production process and assisted with its communication and dissemination. Finally, throughout the project, Natacha Blain, director of the Board on Children, Youth, and Families, provided helpful oversight.
We are also indebted to Bridget Kelly for her guidance, wisdom, and thoughtful substantive work as a consultant for this study, as well as consulting writer Erin Hammers Forstag, who provided invaluable writing assistance and played an important substantive role in drafting the report. In addition, we thank Scott Latham and Helen Penn for their valuable commissioned papers, which informed our deliberations.
This Consensus Study Report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies in making each published report as sound as
possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.
We thank the following individuals for their review of this report: Kimberly Boller, senior research psychologist, Mathematica Policy Research, Inc., Princeton, New Jersey; W. Clayton Burch, Office of the State Superintendent, West Virginia Department of Education; Miriam Calderon, Early Learning Systems, State of Oregon; Rachel Connelly, Department of Economics, Bowdoin College; Martha A. Darling, education policy consultant, Ann Arbor, Michigan; Kenneth A. Dodge, Sanford School of Public Policy, Duke University; Jana Fleming, Early Childhood Policy, Salama bint Hamdan Al Nahyan Foundation, Abu Dhabi, United Arab Emirates; Robert French, NorthStar Learning Centers, New Bedford, Massachusetts; James J. Heckman, Department of Economics, The University of Chicago; Geoffrey Nagle, president and CEO, Erikson Institute, Chicago, Illinois; Adele Robinson, School of Public Policy/School of Public Health, University of Maryland; Louise Stoney, Alliance for Early Childhood and Finance and Opportunities Exchange, West Palm Beach, Florida.
Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations of this report nor did they see the final draft before its release. The review of this report was overseen by Rosemary Chalk, independent consultant, Bethesda, Maryland, and Sherry Glied, Dean’s Office, Robert F. Wagner Graduate School of Public Service, New York University. They were responsible for making certain that an independent examination of this report was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring committee and the National Academies.
La Rue Allen, Chair
Sheila Moats, Costudy Director
Emily P. Backes, Costudy Director
Committee on Financing Early Care
and Education with a Highly
Qualified Workforce
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Contents
Defining Early Care and Education
Transforming the Early Care and Education Workforce
Financing High-Quality Early Care and Education
2 Landscape of Early Care and Education Financing
History and Evolution of Early Care and Education Policy in the United States
Current Early Care and Education Financing Landscape
4 Current Financing for Early Care and Education: Affordability and Equitable Access (Principle 2)
Current ECE Usage and Affordability for Families
Financing Mechanisms’ Support of Equitable Access
5 Current Financing for Early Care and Education: Ensuring High Quality Across Settings
Principle 3: Easy-to-Administer Financing with Incentives for Quality
Principle 4: Variety of High-Quality Service Options
Principle 5: High-Quality Facilities
Principle 6: Quality Assurance and Improvement
Conclusion on Current Financing for Early Care and Education
6 Estimating the Cost of High-Quality Early Care and Education
Cost Elements of High-Quality Early Care and Education
Example Part I: Illustration of a Total Cost Estimate
Example Part II: Family Payments in a High-Quality Early Care and Education System
Example Part III: Sharing the Cost, Filling the Gap
7 A Vision for Financing Early Care and Education
An Effective Financing Structure
Sharing the Cost for High-Quality Early Care and Education
Planning for the Transition to High Quality
Financing Workforce Transformation
Assessing Progress Toward Quality
A. Methodology and Policy Choices and Assumptions for Cost Estimation
C. Determining a Reasonable Share of Costs for Families to Pay