Order Code RL31123
Report for Congress
Received through the CRS Web
Early Childhood Education:
Federal Policy Issues
Updated January 27, 2003
Gail McCallion
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Early Childhood Education: Federal Policy Issues
Summary
Between 1990 and 2000, the percentage of 3 to 5 year olds in the United States
enrolled in some kind of preprimary (center-based or kindergarten) education
increased from 59% to 64%. At the same time, data indicate that some children need
more assistance to be ready to learn effectively when they enter kindergarten, and that
many school-age children are having difficulty becoming proficient readers.
Research on the effects of quality early childhood education and care programs
indicates positive short-term effects in terms of cognitive functioning, school
readiness, and social behavior; and also supports positive long-term effects for
children from “model” early intervention. Long-term results from more “typical”
programs, such as Head Start, are less conclusive.
Most researchers have found high-quality early childhood programs to have
several factors in common: low teacher-child ratios, well-trained and well-paid
teachers, and low staff turnover rates.
The principal federal programs presently providing funding for early childhood
education and care are: Head Start; Title I, Part A of the Elementary and Secondary
Education Act (ESEA); the William F. Goodling Even Start Family Literacy
Programs; the Individuals with Disabilities Education Act; the Early Reading First
Program, the Child Care and Development Block Grant; the Social Services Block
Grant; and the Early Learning Fund.
State investments in preprimary education have grown dramatically in the last
decade. According to the Children’s Defense Fund, spending by states on
prekindergarten increased from approximately $700 million in 1991-1992 to
approximately $1.7 billion in 1998-1999. Participation increased from
approximately 290,000 children in 1991-1992 to almost 725,000 children in 1998-
1999.
Congress is considering what role is appropriate for the federal government in
providing and setting standards for early childhood education and care, and how to
best enhance the supply of quality early childhood care and education. At the same
time, issues have been raised about what form federal aid for early childhood
education and care should take, how to coordinate new federal initiatives with
existing federal programs, and how to avoid supplanting or discouraging state
initiatives for early childhood education and care. This report will be updated
periodically.

Contents
Children Served . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Research on Efficacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Federal Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
State Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. Child Care Arrangements of Preschool Children, by Child and
Household Characteristics: 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Early Childhood Education:
Federal Policy Issues
Between 1990 and 2000, the percentage of 3 to 5 year olds in the United States
enrolled in some kind of preprimary (center-based or kindergarten) education
increased from 59% to 64%.1 At the same time, data indicate that some children
need more assistance to be ready to learn effectively when they enter kindergarten;
and that many school-age children are having difficulty becoming proficient readers.
National Assessment of Education Progress (NAEP) data for 2000 indicate that only
32% of 4th graders are at or above the proficient level in reading. For 4th graders
eligible for free/reduced-price lunches, only 14% are at or above the proficient level.2
In addition, the scientific community has fueled interest in early childhood with
research indicating that the early years are crucial for brain development; and, that
there is a connection between the stimulation young children receive from their
preschool teachers or care givers, and success in later learning and intellectual
growth. This research has altered the way scientists see the development of the brain;
most now believe that the neural circuitry of the brain is not fixed at birth but
develops in response to early experiences. Research has shown that the first 3 years
of life are the period of most rapid brain growth, and that there are certain “windows
of opportunity” for certain kinds of learning (language, for example). Scientists have
discovered that beginning in early adolescence, brain development occurs through
the “pruning” of unnecessary synaptic connections. Those synapses that receive the
most use in childhood are the likeliest to become permanent; those that are unused
are the most likely to be eliminated.3 However, researchers also caution that early
intervention should not be viewed as a panacea; people continue to learn, and the
human brain continues to incorporate new information, throughout life.
This report examines what we currently know about preprimary programs
including numbers of children served and their family characteristics; as well as data
on the efficacy of preprimary programs in enhancing later learning and other life
1 U.S. Department of Education. Office of Educational Research and Improvement.
National Center for Education Statistics. The Digest of Education Statistics 2001. p. 116.
2 U.S. Department of Education. Office of Education Research and Improvement. National
Center for Education Statistics. The Nation’s Report Card: Fourth-Grade Reading 2000,
NCES 2001-499, by P. L. Donahue, R. J. Finnegan, A. D. Lutkus, N. L. Allen, and J. R.
Campbell. Washington, D.C. 2001. Proficiency is defined as: “solid academic performance
for each grade tested — 4, 8, and 12. It reflects a consensus that students reaching this level
have demonstrated competency over challenging subject matter and are well prepared for
the next level of schooling.” The National Education Goals Panel. Reading Achievement
State by State, 1999. Washington, U.S. Govt. Print. Off., 1999. p. 131.
3 Shore, Rima. Rethinking the Brain. Families and Work Institute. New York, NY. 1997.

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skills. Current federal programs that serve preschool age children are described, and
policy issues which may arise as the federal role in early childhood education is
debated, are discussed.4
Children Served
In examining the number and growth of preprimary education programs, we
immediately confront the question of how to conceptually and empirically separate
education from child care in programs for young children. While the focus of this
report is on early childhood education, it is difficult to empirically differentiate
between early education and child care because in early childhood settings the two
are often intertwined. Many experts believe that both are required for a quality
environment for young children:
... care and education cannot be thought of as separate entities in dealing with
young children. Adequate care involves providing quality cognitive stimulation,
rich language environment, and the facilitation of social, emotional and motor
development. Likewise, adequate education for young children can occur only
in the context of good physical care and of warm affective relationships.5
Available national-level data on early childhood education does not delineate
time spent in education activities versus child care. Existing data do differentiate
between center-based versus other settings (relative care and family day care centers)
for child care and early childhood education. This discussion of national data focuses
on center-based programs, broadly defined, because program names (day care center
versus preschool for example) do not necessarily correlate with whether a program
has an academic component or not.6 Some day care centers contain an academic
component, while some preschools, for example, may not. Center-based programs
include day care centers, nursery schools, prekindergarten programs, preschools, and
Head Start programs.
For these reasons the data on children’s participation in early childhood
education is based on center-based preprimary programs, broadly defined.7 These
4 For a complete list of current legislation see CRS Report RL30944, Child Care Issues in
the 107th Congress, by Melinda Gish.
5 National Research Council. Eager to Learn: Educating Our Preschoolers. Washington,
National Academy Press, 2000. p. 2.
6 In this report, the terms preschool, prekindergarten and preprimary care and education
programs are used interchangeably. Because existing national data are based on parental
responses, and an academic program may call itself a day care center, a preschool or a
prekindergarten, parental responses on whether their child’s care includes an academic
component often simply reflect the title of the program their child attends. State data, which
are available for prekindergarten (including Head Start programs) programs, are discussed
in the text of the report below.
7 NCES Early Childhood Birth Cohort Longitudinal Study is scheduled to collect its first
round of data (on children 9 months old as of September 2001). The first follow up (at 18
months) will directly ask child care staff (rather than parents) questions about the academic
(continued...)

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data indicate that, in 1999, 59.7% of 3, 4, and 5 year olds, not yet in kindergarten,
were enrolled in some kind of center-based program (see Table 1). Children in
poverty were less likely (51.4%) to be in center-based programs than were children
not in poverty (62.3%). There is a clear correlation between rising income and
participation of children in center-based care. Almost 75% of children in households
with more than $75,000 in income participated in center-based care, compared to
51.1% of children in households with incomes of $10,001-$20,000.8 Additionally,
3, 4, and 5 year olds whose mother graduated from college were much more likely
(73.9%) than were 3, 4, and 5 year olds whose mother didn’t graduate from high
school (42.4%) to attend a center-based program.
Older children were more likely to be in a center-based program than were
younger children. Four and 5 year olds (69.6% and 76.5%, respectively) were more
likely to attend a center-based program than were 3 year olds (45.7%).
Table 1. Child Care Arrangements of Preschool Children,
by Child and Household Characteristics: 1999a
(number in thousands)
Percent in non-parental
arrangements
Non-
Center
Relative
relative
based
Parental
Childrenb
care
carec
programd
care only
Characteristic
No.
%
No.
%
No.
%
No.
%
No.
%
Age, total (3-5)
8,525 100.0 1,947
22.8 1,369 16.1 5,091
59.7 1,968
23.1
3 years old
3,814
44.7
929
24.4
619 16.2 1,744
45.7 1,175
30.8
4 years old
3,705
43.5
815
22.0
588 15.9 2,577
69.6
656
17.7
5 years old
1,006
11.8
203
20.2
162 16.1
770
76.5
136
13.5
Race/ethnicity
White, non-Hispanic
5,389
63.2 1,012
18.8 1,047 19.4 3,232
60.0 1,251
23.2
Black, non-Hispanic
1,214
14.2
405
33.4
90.0
7.4
889
73.2
166
13.7
Hispanic
1,376
16.1
365
26.5
175 12.7
609
44.2
460
33.4
Other
547
6.4
165
30.2
57 10.4
362
66.1
91
16.6
Household income
$10,000 or less
1,064
12.5
293
27.5
141 13.2
595
55.9
293
27.5
10,001-20,000
1,342
15.7
395
29.4
184 13.7
685
51.1
372
27.7
20,001-30,000
1,333
15.6
362
27.1
167 12.5
685
51.4
398
29.8
30,001-40,000
1,098
12.9
247
22.5
162 14.7
609
55.4
272
24.8
40,001-50,000
848
9.9
180
21.3
116 13.6
511
60.2
196
23.1
7 (...continued)
component of programs, and will potentially provide helpful data on this issue.
8 Children in households in the two lowest income categories had slightly elevated
participation rates due to Head Start participation. Additionally, because children may
participate in more than one kind of care many children are counted more than once. (For
example, a child may attend Head Start in the morning, and then attend a center-based
program or family day care center in the afternoon.)

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Percent in non-parental
arrangements
Non-
Center
Relative
relative
based
Parental
Childrenb
care
carec
programd
care only
Characteristic
No.
%
No.
%
No.
%
No.
%
No.
%
50,001-75,000
1,397
16.4
242
17.3
293 21.0
930
66.6
249
17.8
More than $75,000
1,443
16.9
229
15.9
307 21.3 1,076
74.6
189
13.1
Poverty statuse
In poverty
2,004
23.5
518
25.9
249 12.4 1,030
51.4
626
31.2
Not in poverty
6,522
76.5 1,429
21.9 1,119 17.2 4,061
62.3 1,342
20.6
Mother’s highest education level
Less than high school
1,255
14.7
330
26.3
127 10.2
532
42.4
459
36.6
High school/GED
2,188
25.7
571
26.1
293 13.4 1,147
52.4
612
28.0
Vocational/technical or some 2,596 30.5 606 23.4 455 17.5 1,632 62.9 526 20.3
college
College graduate or higher
2,213
26.0
315
14.3
440 19.9 1,635
73.9
328
14.8
No mother in household
273
3.2
124
45.4
53 19.5
144
52.9
42
15.5
Source: U.S. Department of Education, National Center for Education Statistics, Early Childhood
Program Participation Survey of National Household Education Survey (NHES), 1999.
a Children may participate in more than one type of care; therefore row numbers may sum to more than
totals. Numbers also may not sum to totals due to rounding.
b Estimates are based only on children 3-5 years who have not entered kindergarten or who are
enrolled in school but are ungraded.
c Non relative care includes family day care and nanny care.
d Center based programs include day care centers, nursery schools, prekindergarten, preschools, and
Head Start programs.
e Poverty was defined as a household income of $17,029 for a family of four in 1999.
And black, non-Hispanic children were more likely (73.2%) than either white
non-Hispanic children (60%) or Hispanic children (44.2%) to be in a center-based
program. This is largely attributable to greater participation in Head Start programs
by black children than by white or Hispanic children.
Research on Efficacy
There is an extensive and growing body of research examining the effectiveness
(usually measured by cognitive functioning, school readiness and/or social
adjustment in the shorter-run; and by subsequent wages, high school graduation rates,
criminal activity and welfare use in the longer-run) of early childhood programs. The
conclusions of four major surveys of the literature on early childhood program
outcomes are discussed below.
In December 2000, a study titled Eager to Learn was released by the Committee
on Early Childhood Pedagogy.9 The Committee was established by the National
Research Council in 1997 to review and synthesize the theory and research on early
9 Eager to Learn. Executive Summary. National Research Council. National Academy
Press. Washington, D.C., 2000.

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childhood pedagogy, and to make recommendations, based on the present state of
knowledge, for early childhood education programs and public policy. Eager to
Learn included 19 specific recommendations in four major areas: (1) teacher
training; (2) teaching materials; (3) public policies to support quality preschools; and
(4) dissemination of information on preschool development.
The Committee made recommendations in all four of these areas that it argued
would significantly improve the U.S. system of preschool education and care. The
Committee agreed that “the case for a substantial investment in a high-quality system
of child care and preschool on the basis of what is already known is persuasive.”10
One of the strongest recommendations made in Eager to Learn was regarding teacher
training. The committee recommended that all children in early care programs be
provided with a teacher who has a bachelor’s degree and specialized education in
early childhood. The Committee on Early Childhood Pedagogy stated,
The professional development of teachers is related to the quality of early
childhood programs, and program quality predicts developmental outcomes for
children. Formal early childhood education and training have been linked
consistently to positive caregiver behaviors. The strongest relationship is found
between the number of years of education and training and the appropriateness
of a teacher’s classroom behavior.11
The importance of teacher education and training runs throughout the literature
on early childhood education. Another major study, The Cost, Quality and Outcomes
Study, begun in 1993, examines the impact of “typical” center-based as opposed to
“model” early childhood programs, by tracking children from preschool through their
early elementary years. This study considered two broad measures of quality:
classroom practices and teacher child relationships. Based on the latest update (June
1999),12 which includes 4 years of data tracking individual children from preschool
through second grade, the researchers have found that the quality of care provided is
key.
Children who attended quality childcare programs (those programs ranking in
the 75th percentile or better) when they were 3-4 years old, were reported to have
subsequently scored better on math, language and social skills in early elementary
school than children who attended poor quality childcare programs (those programs
ranking in the 25th percentile or less). Furthermore, better classroom behavior and
social skills were reported in children who had closer relationships with their
childcare teachers. These positive effects in math skills, thinking/attention skills, and
problem behaviors remained through second grade, but the differential diminished
over time. In addition, the researchers found that the positive effects of quality
childcare, and the negative effects of poor quality childcare, are most pronounced for
10 Ibid., p. 322.
11 Ibid., p. 7.
12 FPG Child Development Center, University of North Carolina. The Children of the Cost,
Quality and Outcomes Study Go To School. June 1999.

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children at risk of not doing well in school.13 Furthermore, the researchers found
teacher pay and qualifications to be linked with quality programs:
Our research indicated that the quality of child care was related to both the
formal education levels and the specialized early childhood training of the
classroom teachers. Similarly, teacher compensation was closely linked to the
quality of services in child care. The findings reported here further underline the
need to raise quality, indicating that these child care experiences continue to
influence children’s development through the early elementary years.14
A 1998 Rand study, Investing In Our Children, authored by Lynn Karoly and
seven colleagues, examined the costs and benefits of early childhood interventions
(specifically those promoting the development of “at risk”15 children, including Head
Start, Individuals with Disabilities Education Act (IDEA) programs, parenting
classes, home visit, preschool and prekindergarten programs). Karoly et al. conclude
that well-designed programs can produce tangible benefits for children and their
families in one or more of four broad domains: cognitive development, education,
economic self-sufficiency, and health.16
Karoly, et al. conducted a cost-benefit study of the two programs included in
their research that had an experimental design including control groups and, had long
follow-up periods for tracking participants. They concluded (for these two studies
only) that there were tangible benefits, but the benefits may accrue over a long time
period, while the costs occur in the short term. Karoly et al. also note that the
question of how best to target participants to obtain the highest benefit to cost ratios
is uncertain. They state that existing scientific research is insufficient to discern why
some programs succeed and others don’t; or whether some program designs work
best, i.e., by focusing on: children or parents; infancy or preschool years; one or
multiple independent programs; or individually tailored programs that serve a smaller
pool in comparison to larger programs that serve more children.
A survey conducted by Janet Currie, titled Early Childhood Intervention
Programs: What Do We Know?, examined four studies that used random
assignment, had low rates of participant attrition, and followed children’s progress
at least through middle school.17 In addition, Currie looked at large scale publicly
funded programs, primarily Head Start programs. Currie found that well-funded,
well-designed programs can have a long term impact on children’s outcomes,
especially for disadvantaged children.
13 Mother’s level of education was used as a proxy for risk of not doing well in school.
14 The Children of the Cost, Quality Outcomes Study Go To School, June 1999. p. 13.
15 Karoly, Lynn, et al. Investing in Our Children. Rand, 1998. p. 110. At risk children,
according to Karoly et al., are those exposed to one or more stressors in the arenas of
cognitive, emotional or resources deficiencies.
16 Ibid., p. 9.
17 Currie, Janet. Early Childhood Intervention Programs: What Do We Know? UCLA and
NBER, April 2000.

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The four studies Currie examined were: the Early Training Project; the Carolina
Abecedarian Project; the Perry Preschool Project; and the Milwaukee Project. Currie
found only one of the four had a long term impact on IQ (the Milwaukee Project),
although all four showed a positive effect on long term scholastic success. Sixty-
eight percent of the children who participated in the Early Training Project graduated
from high school compared to 52% of the control group. At age 21, the children who
participated in the Carolina Abecedarian Project were twice as likely to still be in
school or to have attended a 4-year college. Positive effects were twice as large for
the most disadvantaged children in this study. The Perry Preschool project found that
as of age 27, children who participated in the project experienced positive effects on
achievement tests, grades, high school graduation rates, and earnings, in addition to
lower rates of crime and welfare use. Children in the Milwaukee project were found
to have higher IQs in 8th grade than children in the control group, but they did not
have positive gains in other measured areas.
However, these four programs were all “model” programs with low
pupil/teacher ratios and highly qualified staff. Currie did not find the same
conclusive evidence of long term benefits when she examined the Head Start
program. Currie and her colleagues examined Head Start by using siblings (who did
not attend Head Start) of participants as a control group. Head Start is currently the
largest publicly supported preschool program for disadvantaged children, serving
approximately 950,000 children, mainly in part-day programs. Currie et al. found
that initial test score improvements for black Head Start participants faded in
elementary school, but not for white students. They surmised that this “fading”
might be due to subsequent school deficiencies, since the black Head Start
participants subsequently attended schools of lower quality than other black children,
but this was not true for the white Head Start students. Currie states:
The evidence reviewed above suggests that model early intervention programs
can have positive long-term effects on children. But, there is a large gap between
these programs and the large-scale, publicly-funded interventions that are
currently in place ... A point that is often lost in the controversy over whether
there are long-term benefits of Head Start is that there are many well-documented
short-term benefits. Depending on precisely which benefits are counted and on
how we value them, it can be shown that the short- and medium-term benefits of
Head Start already pay back much of the cost of the program.18
Finally, the measurement of more “typical” programs is usually linked to
evaluations of Head Start, the largest federal program with education and care as its
primary mission. Available studies on Head Start (based on Head Start-funded
Family and Child Care Experience Survey) do provide data on program outcomes,
but do not permit a definitive conclusion regarding program impact; i.e., whether
observed outcomes are due to a child’s participation in Head Start, or are due to other
factors:
Recent data collected on program outcomes show that children participating in
Head Start exhibit many of the skills thought to indicate a readiness to learn in
school. HHS is now undertaking efforts to determine the extent to which such
18 Ibid., p. 20.

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outcomes are directly attributable to children’s participation in the program
rather than to other factors.19
In sum, study data do support positive short-term effects of high-quality early
childhood programs in terms of cognitive skills, school readiness and social behavior;
and positive long-term effects in terms of greater high school completion rates,
higher earnings, less criminal activity and welfare use for “model” early intervention
programs. Long-term effects from more “typical” programs, such as Head Start, are
less conclusive. In part this is due to the difficulty of separating the influence of early
intervention on children’s later success from all the other factors that are significant
in influencing long-term success.
Federal Programs
Federal programs for young children currently provide funding for education
and care, services to education and care facilities, and tax credits to families for child
care. Only the largest programs which explicitly permit funds to be used in part for
early education and care are discussed here.20
Title I, Part A of the Elementary and Secondary Education Act
(reauthorized by the No Child Left Behind Act, P.L. 107-110) is the largest
federal program serving disadvantaged children, particularly school-aged children.
After Head Start, it is the largest program providing early education and care to
young children. In the 1999-2000 school year, Title I funded approximately $407
million in preschool services (total Title I funding was approximately $7.9 billion
during that period). School districts that received this funding served approximately
313,000 preschool children (8% of the future kindergarten population in this age
group). However, preschool services are not separately funded under Title I — such
spending occurs if local educational agencies (LEAs) choose to use some of their
Title I funds for this purpose.
The William F. Goodling Even Start Family Literacy Programs provide
education and related services jointly to parents lacking a high school diploma (or
equivalent) and their young children. Even Start services include basic academic
instruction and parenting skills training for the adults, and early childhood education
for their children through age 7 (children 8 and older may receive services if they are
provided in collaboration with ESEA Title I, Part A), along with necessary
supplementary services such as child care or transportation.21
Early Reading First, authorized by Title I, Part B Subpart 2 of the No
Child Left Behind Act, P.L. 107-110. The new early reading first initiative
19 U.S. General Accounting Office. Early Education and Care: Overlap Indicates Need to
Assess Crosscutting Programs. HEHS-00-78, April 2000.
20 For a discussion of all federal childcare programs including tax credits, see CRS Report
RL30944, Child Care Issues in the107th Congress, by Melinda Gish.
21 See CRS Report RL30448, Even Start Family Literacy Programs: Background and
Reauthorization Issues, by Gail McCallion.

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provides competitive grants to LEAs and other public and private entities, from the
Secretary of Education, to: provide preschool age children (particularly those from
low-income families) with greater opportunities for exposure to high-quality
language and literature-rich environments, support professional training, support
acquisition of scientifically based instructional material on reading for preschoolers,
and promote integration of these materials into existing programs serving
preschoolers.22
The largest federal program with early childhood development as its primary
mission is Head Start. The program is authorized through FY2003.23 The Head
Start program provides educational services as well as health, nutrition, and other
services to low-income children to prepare them to enter kindergarten. Grantees are
required to reserve at least 10% of their slots for children with disabilities. In 1994,
Early Head Start was established so that children younger than 3 years old could be
served in greater numbers by the program. The law mandates that certain amounts
of the total Head Start appropriation be set aside each year for Early Head Start; in
FY2002 and FY2003 the set-asides will be 10% each year.
The Child Care and Development Block Grant (CCDBG) is the primary
federal grant program supporting low-income families with child care needs. It is
administered by HHS, and provides block grants to states, through mandatory and
discretionary funds (referred to in combination as the Child Care and Development
Fund (CCDF)), which are used to help provide low-income families with child care
subsidies. Authorization for both funding streams is due to expire at the end of
FY2003.24
The Social Services Block Grant (SSBG), authorized by Title XX of the
Social Security Act, is a block grant to states. States are authorized to use SSBG
funds for social services, including child care. SSBG is administered by HHS. State
allocations are based on population.25 According to HHS, in FY1999, approximately
13% of SSBG funds were used for child care.
The Early Learning Opportunities Act, proposed by the Clinton
Administration, was authorized by the FY2001 Consolidated Appropriations Act
(P.L. 106-554). This program provides grants to communities to enhance school
22 See CRS Report RL31241, Reading First and Early Reading First: Background and
Funding, by Gail McCallion.
23 For information on Head Start, see CRS Report RL30952, Head Start: Background and
Funding, by Alice Butler and Melinda Gish.
24 See CRS Report RL30785, The Child Care and Development Block Grant: Background
and Funding, by Alice Butler and Melinda Gish.
25 States are entitled to their share, according to a formula, of a nationwide funding ceiling
or “cap” that is specified in the statute. See CRS Report 94-953, Social Services Block
Grant (Title XX of the Social Security Act), by Melinda Gish.

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readiness for children under 5; specifically by funding efforts to improve the
cognitive, physical, social, and emotional development of these children.26
Finally, federal support is provided for early childhood education and care
through tax credits to assist parents with child care expenses.27
State Activities
State investments in preprimary education have grown dramatically in the last
decade. According to the Children’s Defense Fund, spending by states on
prekindergarten increased from approximately $700 million in 1991-1992 to
approximately $1.7 billion in 1998-1999. Participation increased from
approximately 290,000 children in 1991-1992 to almost 725,000 children in 1998-
1999.28
Forty-two states in 1998-1999 invested state money in some kind of
prekindergarten program and 16 of these states provided state money for multiple
initiatives. However, the amount of state financial investments in prekindergarten
and Head Start, as well as program structure, vary enormously from state to state.
In 1998-1999, 10 states accounted for three-quarters of all spending on early
childhood programs.29 State contributions vary from less than $1 million to over
$200 million, and the number of children served also varies enormously, from a few
hundred to over 120,000.
Although states have dramatically increased spending on prekindergarten
initiatives, funding in most states is only sufficient to provide services to a small
number of eligible children, and in many cases for limited hours and part-day care.
Thirty-seven of the states with prekindergarten programs fund classes of 2½-4 hours
per day (although the state may also provide funding or coordinate with other
services to provide full day coverage for children). States with the largest per capita
investment in 1998-1999 were: Connecticut, the District of Columbia, Georgia,
Illinois, Kentucky, Massachusetts, Ohio, and Oklahoma.
In 1998-1999 most states allowed prekindergarten funds to go to Head Start
programs, private non-profit, and for-profit providers, as well as to public schools.
However, eight states, and the District of Columbia, required state prekindergarten
26 See CRS Report RL30944, Child Care Issues in the 107th Congress, by Melinda Gish.
27 Ibid.
28 These state data include only prekindergarten initiatives (including Head Start), defined
as having a focus on the education of the child; and are distinct from the states’ child care
subsidies (although the two may be coordinated). Blank, Helen, with Karen Schulman, and
Danielle Ewen. Seeds of Success, State Prekindergarten Initiatives, 1998-1999. Children’s
Defense Fund, September 1999.
29 California, Florida, Georgia, Illinois, Massachusetts, Michigan, New Jersey, New York,
Ohio, and Texas.

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funds to be used only by public schools.30 Six additional states required funding to
go to public schools, although schools had the option of contracting out for programs
(few did so).31
States also differ in eligibility criteria. Eighteen states limit participation to 4
year olds. Fifteen state initiatives permit 3 and 4 year olds to participate through
separate initiatives, and 16 initiatives fund Head Start models. Eight states extend
eligibility to younger children as well. Family income is also frequently used as an
eligibility criterion, with 10 states requiring that explicit income eligibility criteria
be employed.
Currently only three states (Georgia, New York, and Oklahoma) and the District
of Columbia offer universal preschool or are in the process of implementing
universal preschool.32 Georgia is presently the only state providing preschool for all
4 year olds whose families desire it.33 The District of Columbia provides a full day
(6.5 hours) public school prekindergarten program for all 4 year olds on a first-come,
first-served basis. Waiting lists are reported to be relatively short. Oklahoma
provides prekindergarten to 4 year olds in 80% of its school districts on a first-come,
first-served basis. Approximately half of the state’s 4 year olds are served, and 40%
of those served are in full day programs. New York began implementing its
universal prekindergarten program in 1998-1999. Presently the New York program
is only partially phased-in and there are concerns that there may not be sufficient
funding to fully implement the program. In the absence of full funding, first priority
is given to economically disadvantaged children.34
30 Kansas, Louisiana, Maine, New York, Pennsylvania, West Virginia, and Wisconsin.
31 Florida, Illinois, Maryland, Ohio, South Carolina, and Texas.
32 National Center for Children in Poverty. Map and Track: State Initiatives For Young
Children and Families 2000 Edition. Mailman School of Public Health, Columbia
University, 2000.
33 In 1998-1999 Georgia invested $217 million in prekindergarten programs which served
61,000 children. The Georgia universal prekindergarten program is funded by a Georgia
state lottery. The program was started in 1993 as prekindergarten for low income children,
but was expanded to a voluntary, universally available program for all 4 year olds in 1995.
Georgia’s prekindergarten and Head Start are estimated to serve approximately 75-80% of
all eligible 4 year olds in the state. The program was originally administered by the Georgia
state Department of Education but was moved to an independent Office of School Readiness
in 1996. Georgia provides funding to public school districts who may (and many do)
subcontract to Head Start centers, child care centers, private schools and community
agencies. Georgia structures its funding as a formula based on student enrollment and
teacher credentials.
34 Gallagher, James, with Jenna Clayton and Sarah Heinemeier. Education for Four-Year-
Olds. State Initiatives. National Center for Early Development and Learning. Frank Porter
Graham Development Center, 2001. p. 30.

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Policy Issues
Research indicates that the quality of early childhood education and care is
significant for children’s later academic success, particularly for disadvantaged
youngsters. Yet, the U.S. system of preschool education and care presently varies
enormously, not only in quality and content, but also in organization, sponsorship,
source of funding, and the extent of government regulation.35
An economic argument can be made for a federal role in providing aid for early
childhood education and care due to externalities and information imperfections in
the market for early childhood care and education.36 This intervention might take the
form of provision of care, subsidies or tax credits for families, tuition credits for early
childhood educators, licensing requirements, or simply the provision of information.
Externalities exist because the benefits of quality early childhood education programs
accrue not only to the families who purchase these services, but to society at large
(through lower taxes for welfare and crime, through higher productivity of well-
educated citizens, etc.) However, when the costs of these services are borne only by
parents, the price paid for these services will be artificially low.37 In addition,
because of imperfect information and geographic limitations, parents may not be able
to locate the best providers of early childhood education and care, or know how best
to evaluate the costs, quality and services of different providers.
However, even if federal aid is determined to be appropriate, there is no
consensus on how much federal aid should be provided and what form of aid would
be most effective. There is also disagreement on whether such aid should be targeted
to disadvantaged youngsters or should be universal. Others express concern that such
aid may supplant current state programs. Congress is considering whether there
should be an enhanced role for the federal government in funding and setting
standards for early-childhood education and care; and how to effectively coordinate
any new initiatives with existing federal and state programs.
Most researchers have found high quality early childhood programs to have
several factors in common: low teacher-child ratios, well trained and well paid
teachers, and low staff turnover rates. Yet well trained, better paid staff, and low
teacher-child ratios translate into more expensive programs. Presently many middle
class families pay privately for their child or children’s early education and care.
35 Ibid., p. 2.
36 A market failure is defined as “a situation in which a market left on its own fails to
allocate resources efficiently.” Vandell, Deborah, and Barbara Wolfe. Child Care Quality:
Does It Matter and Does It Need to be Improved? U.S. Department of Health and Human
Services. Washington, D.C., 2000.
37 Ibid., p. 5. “[M]arket failure perpetuates itself. Because the demand for high-quality care
is too low, compensation is too low, and the more highly trained seek employment in other
spheres. As a result, quality declines, unless intervention occurs.”

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Many children from low-income families participate in Head Start, although in 2000
only 61% of eligible 4 year olds were able to participate.38
The GAO estimated the cost of high quality early childhood education in 1988
to be $4,200 annually per child, plus $600 for in-kind contributions.39 Sixty-five
percent of these costs are attributable to personnel costs.40 If we adjust this 1988
figure of $4200 for inflation, it would equal $6132 in year 2000 dollars.41 Average
costs (without assessing quality) for a 4 year old in a child care center in 2000, were
$4,000 to $6,000 per year, according to the Children’s Defense Fund. In all states but
one (Vermont) the annual costs of child care in an urban area are greater than the
costs of public college tuition. The costs of preprimary care are particularly
burdensome for low-income families according to the Children’s Defense Fund:
Even if a two-parent family with both parents working full time at minimum
wage ($21,200 a year before taxes) managed to budget 10 percent of their income
for childcare ($2,140), they would be left several thousand dollars short of what
they needed to afford average-priced childcare, much less the higher prices
charged by many better quality centers and family childcare homes.42
Thus, given the costs of early childhood education and care and limited
resources, should federal aid be targeted to disadvantaged children, such as those
who are presently not being served by Head Start? Research data indicates that
disadvantaged children especially benefit from quality early childhood education and
care. This research, as well as equity considerations might support directing federal
aid, if limited, to disadvantaged children. Proponents of targeting aid argue that
universal care would provide care to children whose families already are paying for
care privately and can afford to do so. However, proponents of universal care argue
that these costs are also burdensome on middle-class families and universal service
provision could enhance overall quality and political viability.
Congress is also concerned with how to increase the supply of quality early
childhood care and education programs, without supplanting state provision of early-
childhood education and care. Opponents of increased federal involvement argue
that this aid will supplant existing private and state initiatives, and that more federal
regulation of early childhood education and care services may effectively increase the
costs of care to families. Furthermore, opponents of more federal aid for early
38 CRS Report RL30952, Head Start: Background and Funding, by Alice Butler and
Melinda Gish.
39 GAO surveyed National Association for the Education of Young Children (NAEYC)
accredited centers. GAO assumed these accredited programs would give a reasonable
estimate of the costs of a high quality early-childhood education program. U.S. General
Accounting Office. Early Childhood Education. What Are the Costs of High-Quality
Programs? Washington, D.C., January 1990.
40 See CRS Report RL31118, The Child Care Workforce, by Linda Levine.
41 Using the Consumer Price Index for all urban consumers.
42 Costs are for 2000, and are based on data collected from local child care resource and
referral agencies. Schulman, Karen. The High Cost of Child Care Puts Quality Care Out
of the Reach for Many Families. Children’s Defense Fund, 2000.

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childhood education and care argue that as a matter of principle such initiatives
unduly interfere with the primary role of families in raising young children.
Another issue is how best to ensure quality in early childhood education and
care programs. In some European countries, where universal early childhood care
and education are more prevalent, these programs are usually part of the public
education system. Some argue that U.S. early childhood education and care
programs should be run by public schools, because that would ensure quality
standards and an education component to programs. Proponents argue that having
LEAs in charge of these programs would help provide a qualified well-paid staff and
would be best for focusing efforts on preparing young children for entering
elementary school. Others argue that the public school system has failed low-income
children and should not serve as the model. And, they argue, in order to encourage
continuing state and private efforts to provide quality early childhood education and
care programs, flexibility in programs’ sponsorship (including private providers and
Head Start programs), organization and funding sources should be encouraged.
Furthermore, some argue it would be most efficient and politically feasible to
build on existing programs. Because existing state initiatives vary enormously in
terms of funding, structure, the entities providing care, and level of participation,
concerns have also been raised about whether increased federal aid in the form of
specific new programs might duplicate or discourage these efforts. On the other
hand, if new federal aid is provided in a form intended to complement existing state
efforts (a block grant, for example), it may risk a lack of focus.
Finally, some argue that more coordination of new and existing federal
programs in early childhood education and care is needed. In a GAO report issued
in 2000, the agency concluded that there is presently mission fragmentation and
overlap in federal early childhood care and education programs:
Both occur when more than one federal agency (or more than one bureau within
an agency) is involved in the same broad area of need. Fragmentation can create
inefficient service delivery and administrative complexity because various
agencies are administering similar programs serving similar groups of children.
In addition, mission fragmentation makes coordination among agencies
administering these programs necessary. Program overlap creates the potential
for duplication — which occurs when programs have the same goals, the same
activities or strategies to achieve them, or same targeted recipients. However, a
certain amount of redundancy among programs may be necessary to improve
service delivery, or it may indicate that a certain program is related to a number
of areas.43
Thus, some argue that the federal government needs to focus its efforts, not only
on expanding aid for early childhood education and care, but also on developing
more effective coordination among existing programs for early childhood education
and care.
43 U.S. General Accounting Office. Early Education and Care: Overlap Indicates Need to
Assess Crosscutting Programs. HEHS-00-78, April 2000. p. 7.

Document Outline

congress.gov
- Early Childhood Education: Federal Policy Issues