Child Care Cost and Quality

Future of Children

Volumn 6, Issue 2, 1996, Pages 62-82

  Helburn, Suzanne W ^a   Howes, Carollee ^b  

^a UNIVERSITY OF COLORADO   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ACCREDITATION; CAREGIVER; CHILD; COST; DAY CARE; DECISION MAKING; ECONOMICS; HUMAN; INFANT; NEWBORN; PRESCHOOL CHILD; REVIEW; SOCIAL ENVIRONMENT; STANDARD; UNITED STATES;

ACCREDITATION; CAREGIVERS; CHILD; CHILD DAY CARE CENTERS; CHILD, PRESCHOOL; CHOICE BEHAVIOR; COSTS AND COST ANALYSIS; HUMANS; INFANT; INFANT, NEWBORN; SOCIAL ENVIRONMENT; UNITED STATES;

EID: 0030155043     PISSN: 10548289     EISSN: None     Source Type: Journal    
DOI: 10.2307/1602419     Document Type: Article

References (43)

1. Helburn, S., ed. Cost, quality, and child outcomes in child care centers: Technical report. Denver, CO: Department of Economics, Center for Research in Economic and Social Policy, University of Colorado, 1995.
2. Kontos, S., Howes, C., Shinn, M., and Galinsky, E. Quality in family child care and relative care. New York: Teachers College Press, 1994.
3. Modigliani, K., Helburn, S., Morris, J., and Culkin, M. The economics of family child care project. Unpublished manuscript. Wheelock College, Boston, 1996.
4. Hayes, C.D., Palmer, J.L., and Zaslow, M.J., eds. Who cares for America's children? Child care policy for the 1990s. Washington, DC: National Academy Press, 1990.
5. Howes, C., and Hamilton, C.E. Child care for young children. In Handbook of research on the education of young children, B. Spodek, ed. New York: Macmillan, 1993.
6. See, for example, Gomby, D.S., and Larner, M.B., eds. Long-term outcomes of early childhood programs. The Future of Children (Winter 1995) 5,3:1-224.
7. Phillips, D. Predictors of quality child care. Washington, DC: National Association for the Education of Young Children, 1987.
8. Clifford, R.M., Harms, T., Pepper, S., and Stuart, B. Assessing quality in family child care. In Family day care: Current research for informed policy. D. Peters and A. Pence, eds. New York: Teachers College Press, 1992.
9. Whitebook, M., Howes, C., and Phillips, D. Who cares? Child care teachers and the quality of care in America. Oakland, CA: Child Care Employee Project, 1990.
10. Phillips, D., Mekos, D., Scarr, S., et al. Paths to quality in child care: Structural and contextual influences in children's classroom environments. Unpublished manuscript, 1995.
11. Howes, C., Phillips, D., and Whitebook, M. Thresholds of quality: Implications for the social development of children in center based care. Child Development (1992) 63: 449-60.
12. Howes, C., and Smith, E.W. Relations among child-care quality, teacher-behavior, children's play activities, emotional security, and cognitive activity in child care. Early Childhood Research Quarterly (1995) 10,4:381-404.
13. Phillips, D.A., Howes, C., and Whitebook, M. The social policy context of child care: Effects on quality. American Journal of Community Psychology (1992) 20,1:25-51.
14. Whitebook, M., Phillips, D., and Howes, C. National Child Care Staffing Study revisited: Four years in the life of center-based child care. Oakland, CA: Child Care Employee Project, 1993.
15. Hofferth, S.L. National Child Care Survey, 1990. Washington, DC: The Urban Institute, 1991.
16. Howes, C., and Hamilton, C. E. The changing experience of child care: Changes in teachers and in teacher-child relationships and children's social competence with peers. Early Childhood Research Quarterly (1993) 8:15-32.
17. Kisker, E., and Maynard, R. Quality, cost and parental choice of child care. In The economics of child care. D.M. Blau, ed. New York: Russell Sage Foundation, 1991.
18. Shinn, M., Phillips, D.A., Howes, C., et al. Correspondence between mothers' perceptions and observer ratings of quality in child care centers. Unpublished manuscript, New York University, 1990.
19. Browne-Miller, A. The day care dilemma: Critical concerns for American families. New York: Plenum, 1990.
20. Mitchell, A., Cooperstein, E., and Larner, M. Child care choices, consumer education and low-income families. New York: National Center for Children in Poverty, 1992.
21. Cryer, D. Infant child care: Parent perceptions and child experiences. Unpublished manuscript, University of North Carolina, 1989.
22. Siegel, G., and Loman, L. Child care and AFDC recipients in Illinois: Patterns, problems, and needs. St. Louis, MO: Institute of Applied Research, 1991.
23. Brush, L.R. Projecting the costs of full-day child care from the costs of Head Start. Unpublished manuscript for the National Academy of Sciences Panel on Child Care Policies, 1988.
24. Clifford, R., and Russell, S.D. Financing programs for pre-school children. Theory Into Practice (1989) 28,1:19-27.
25. U.S. General Accounting Office. Early childhood programs: What are the costs of high-quality programs? GAO/HRD-90-43Br. Washington, DC: U.S. GAO, January 24, 1990.
26. Ruopp, R., Travers, J., Glantz, F.M., and Coelen, C. Children at the center Summary findings and their implications. Final report of the National Day Care Study. Cambridge, MA: Abt Associates, 1979.
27. See note no. 3, Modigliani, Helburn, Morris, and Culkin. This study surveyed a subsample of 133 family child care providers who also participated in the Study of Children in Family Child Care and Relative Care. Providers from California, North Carolina, and Texas were interviewed by phone in 1993 to obtain extensive cost, revenue, subsidies, and tax information, as well as information about enrollment, program characteristics, and provider attitudes. These data were combined with information gathered through the companion study on process and structural quality.
28. Ferguson, W.D., and Cosgrove, J. Nonprofit status and wages: An investigation of the child care industry with firm-specific effects. Unpublished paper delivered at the Western Economics Association meetings, June 1994.
29. Preston, A.E. The effects of property rights on labor costs of nonprofit firms: An application to the day care industry. Journal of Industrial Economics (1988) 36,3:337-50.
30. Preston, A.E. The nonprofit worker in a for-profit world. Journal of Labor Economics (1989) 7,4:438-63.
31. Weisbrod, B.A. Nonprofit proprietary sector behavior: Wage differentials among lawyers. Journal of Labor Economics (1983) 1,3:246-63.
32. Mirvis, P.H., and Hackett, E.J. Work and work force characteristics in the nonprofit sector. Monthly Labor Review (April 1983) 106,2:3-12.
33. Rose-Ackerman, S. Altruistic nonprofit firms in competitive markets: The case of day-care centers in the United States. Journal of Consumer Policy (1986) 9:291-310.
34. In the two studies, forgone earnings were measured for each staff member and for each family provider as the difference between the person's actual child care earnings and the wages the person could earn in the same labor market (state, in this case), given the person's age, gender, racial and ethnic background, and number of years of education. To make these calculations, wage equations were estimated for the regions from the 1992 Census of Population Statistics (CPS) tapes. These equations were then used to estimate the forgone earnings of each center teaching staff person and each family child care provider. The CPS tape does not include data on prior experience of workers, and the study data set did not include marital status of staff or their number of children, so these measures could not be included in the wage equations. These exclusions could affect the estimates to some extent.
35. In the GAO study (see note no. 25), labor costs represented 65%, occupancy (including donated space) 11%, food 7%, and other operating costs 19%. As cited in Powell, R., Eisenberg, D. R., Moy, L., and Vogel, J. Cost and characteristics of high-quality early childhood education programs. Child and Youth Care Forum (April 1994) 23,2:103-18.
36. The economic report of the President, 1993. Washington, DC: U.S. Government Printing Office, 1993, p. 361.
37. Most parents are entitled to credit on their federal income taxes ranging from 30% of child care expenses for low-income parents who pay taxes down to 20% for parents with an adjusted gross income greater than $28,000. Given the average incomes of parents in the sample centers, most parents would qualify only for the 20% credit. This estimate over-states the effect of the tax credit because not all parents who are eligible actually take it. (See also the article by Stoney and Greenberg in this journal issue.)
38. Estimates were also calculated for providers with family incomes below 185% of poverty and for providers serving at least three full-time equivalent children. For these two categories, differences from the average were not, on the whole, significant, and so are not reported here.
39. Mukerjee, S., and Witte, A.D. Provision of child care: Cost functions for profit-making and not-for-profit day care centers. Journal of Productivity Analysis (1993) 4: 145-63.
40. Preston, A. Efficiency, quality and social externalities in the provision of day care: Comparison of nonprofit and for-profit firms. Journal of Productivity Analysis (1993) 4:165-82.
41. Powell, I., and Cosgrove, J. Quality and cost in early childhood education. Journal of Human Resources (1992) 27:472-84.
42. Factors included the state in which die center was located, whether centers were for profit or nonprofit, and the mix of age groups of children served.
43. This analysis may understate the cost-quality relationship somewhat because it holds wages constant; it is based on the assumption that wages for particular quality levels of staff members (as indicated by their levels of education) are set in the labor market and that centers pay the going wages. Although this assumption is undoubtedly true for the majority of centers, it is also possible that good-quality centers offer higher-than-market wages, either to attract the best people or to increase productivity of existing staff members by improving their morale and loyalty. In the former instance, wages based on education levels do not capture other worker qualities for which centers have to pay. In the latter instance, it probably costs somewhat more than an average of 13 cents per child per hour to raise quality from mediocre to good levels.