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1. Today @PattyMurray & @BobbyScott reintroduced their Child Care for Working Families Act. This bill is extremely important b/c candidate Biden pointed to it as a model for his own soon-to-be-announced child care plan.
Let's take a look at their plan. https://edlabor.house.gov/media/press-releases/scott-murray-reintroduce-child-care-for-working-families-act
Let's take a look at their plan. https://edlabor.house.gov/media/press-releases/scott-murray-reintroduce-child-care-for-working-families-act
2. As I've said in the past, all proposals should be evaluated against the two major problems w/ the child care market: the high cost of care experienced by many families & the low quality of services offered by far too many providers.
There is considerable evidence for both:
There is considerable evidence for both:
3. The U.S. spends just 0.3% of GDP on child care assistance (OECD ave: 0.7%), forcing families to pay out-of-pocket, largely for private services. This is especially problematic for low-income families, who allocate ~17% of monthly income to child care. https://www.sciencedirect.com/science/article/pii/S0272775717307872
4. Also, the evidence suggests that child care costs are now rising after decades of stagnation. My analysis of the National Household Education Survey shows that family expenses ↑ 35% between 2005-2016. Similar increases are seen for many demo groups. https://drive.google.com/file/d/1UZQ5HzfXQHHaC9CS_JfLhkgedZfPYgTe/view?usp=sharing
5. Low levels of gov support have at least 3 implications: 1. families shift into lower-quality care b/c it costs less 2. lower maternal employment rates: at 65.7%, the U.S. is #23 in the OECD 3. less growth: e.g., Quebec's GDP grew 1.7% in 2008 from its univ child care program.
6. Regarding quality, the situation is unacceptable:
* 42% of child care settings are rated “poor” or “fair” & just 12% of kids receive "positive caregiving"
* More worrying: 16% of kids in the bottom SES quintile attend programs rated =>“good”
* 42% of child care settings are rated “poor” or “fair” & just 12% of kids receive "positive caregiving"
* More worrying: 16% of kids in the bottom SES quintile attend programs rated =>“good”
7. Also, a paper by @JHB_econ & me shows that good economic times may be bad for quality: when unemployment rates are ↓, child care workers have on average ↓ levels of education and experience, turnover rates are ↑, & consumer reviews on Yelp are ↓ https://www.iza.org/publications/dp/14048
8. Then came the pandemic: salt on an open wound
* 60% of parents in March: child care provider closed
* Child care employment ↓166k in Dec 2020
* 81% of open programs report ↓ in enrollment
* Attendance is at 49% of pre-pandemic levels
* Providers are taking on personal debt
* 60% of parents in March: child care provider closed
* Child care employment ↓166k in Dec 2020
* 81% of open programs report ↓ in enrollment
* Attendance is at 49% of pre-pandemic levels
* Providers are taking on personal debt
9. So, what is the Murray/Scott plan & will it address these problems?
First, M/S amends existing policy & $ streams (i.e., CCDBG), works within the existing market (i.e., no public option programs), & subsidizes parents at the current stock of center- & home-based providers.
First, M/S amends existing policy & $ streams (i.e., CCDBG), works within the existing market (i.e., no public option programs), & subsidizes parents at the current stock of center- & home-based providers.
10. Second, to be eligible for a subsidy, a parent must:
* have at least one child ages 0-13
* engage in an "eligible activity" (i.e., employment, job search, job training, education, or health treatment)
* have a family income no more than 150% of the state median income (SMI)
* have at least one child ages 0-13
* engage in an "eligible activity" (i.e., employment, job search, job training, education, or health treatment)
* have a family income no more than 150% of the state median income (SMI)
11. Third, the subsidy is based on family income & structured as follows:
* Income <=75% SMI: cost is fully subsidized
* Income >75% & <=100% SMI: co-pay >0-2%
* Income >100% & <=125% SMI: co-pay >2-4%
* Income >125% & <=150% SMI: co-pay >4-7%
The co-pay is a % of fam income.
* Income <=75% SMI: cost is fully subsidized
* Income >75% & <=100% SMI: co-pay >0-2%
* Income >100% & <=125% SMI: co-pay >2-4%
* Income >125% & <=150% SMI: co-pay >4-7%
The co-pay is a % of fam income.
12. Fourth, the M/S plan largely retains the "parental choice" principle in the original CCDGB. That is, the plan allows families to use the subsidy at most center, home, & family/friend providers. This is good if you like the "choice" principle, tho problematic if you believe...
13. ...the information asymmetries in the market prevent parents from making "best" child care decision. Parents will have more $ to spend but go to low-quality providers anyway bc they can't distinguish qual levels. My worry is that M/S plan may worsen the market's qual problem.
14. I've been critical of the CCDBG on this: it puts $ into families' pockets & turns them lose in a complex market w/o much know-how on selecting a provider. When that happens, you risk this, & I worry that the M/S plan will do the same (cc @Erdal_Tekin_) https://onlinelibrary.wiley.com/doi/full/10.1002/pam.21860
15. But M/S plan does 2 key things to allow parental choice to flourish while minimizing its worst impulses:
* Federal mandates on states to spend CCDBG money on quality improvement activities
* Quality requirements on child care providers serving subsidized children
* Federal mandates on states to spend CCDBG money on quality improvement activities
* Quality requirements on child care providers serving subsidized children
16. On quality spending: states during 2022-2024 must spend 50% of CCDBG $ on quality activities & no more than 10% of $ each year thereafter. "Activities" is broad: ↑ supply, start-up grants, ↑ quality tier, improve local R&R, consumer ed, & lots of workforce dev strategies.
17. On providers' quality requirements: only "eligible" providers can serve subsidized kids. To be so, a provider must comply w/ such quality standards as QRIS, NAEYC ELP, Head Start req's, etc AND must increase staff wages.
IMO, this is *the* decisive component of the bill.
IMO, this is *the* decisive component of the bill.
18. I'm less optimist that the state spending on quality will change much. After all, such mandates have always been included in the CCDF, to no great effect. But the quality requirements on providers, if effective, can be a game-changer. Here's why:
19. Before M/S, providers may be reluctant to invest in quality b/c it's costly. But after, there's a huge number of consumers (<=150% of SMI) with ↑ $ to spend—& only on those "eligible" providers. Thus there may be more willingness to invest to become "eligible".
20. And M/S bill seems serious about measuring, evaluating & monitoring quality. States must submit reports to the feds & providers must submit to evals from states.
Also, quality standards, tho different, apply to centers, homes, relatives & friends. No one escapes scrutiny.
Also, quality standards, tho different, apply to centers, homes, relatives & friends. No one escapes scrutiny.
21. In sum, this policy is seen as promoting constrained parental choice. And it's both more choice-constrained than the current CCDBG & also less quality-constrained than, say, Head Start. Whether it induces providers to look more like Head Start depends crucially on #17.
22. Finally, it's worth comparing the M/S bill to the proposed @SenWarren legislation:
https://twitter.com/chrismherbst/status/1097864150221447168
and the @PeteButtigieg plan:
https://twitter.com/ChrisMHerbst/status/1225415977275252741
Both are serious plans.
I'm happy to provide references for the numbers cited throughout these tweets.
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https://twitter.com/chrismherbst/status/1097864150221447168
and the @PeteButtigieg plan:
https://twitter.com/ChrisMHerbst/status/1225415977275252741
Both are serious plans.
I'm happy to provide references for the numbers cited throughout these tweets.
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