The Child Care Workforce

The Child Care Workforce

Order Code RL31118
CRS Report for Congress
Received through the CRS Web
The Child Care Workforce
September 10, 2001
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

The Child Care Workforce
Summary
The labor force participation of married mothers with young children rose
markedly in recent decades and contributed to the increased demand for paid child
care assistance. The cost of child care consequently is now an integral component of
more families’ budgets than in years past. Since the enactment of welfare reform in
1996, the affordability of child care has become particularly important to growing
numbers of low-income mothers as they leave the welfare rolls for jobs. Congress
passed legislation — principally the Dependent Care Tax Credit and the Child Care
and Development Block Grant (CCDBG) — that expressly subsidizes work-related
child care expenses. The credit offsets a portion of employment-related costs incurred
for the care of certain dependents, including children under age 13. The CCDBG is
intended not only to enhance the affordability of child care services, but also to
improve the availability and quality of paid care provided to youngsters under age 13
in low-income families with a working or in-school parent.
The high labor intensity of the child care industry means that caregivers’ wages
largely drive the fees charged parents. Through the early 1990s, child care providers
appear to have been able to meet parents’ increased demand for services by drawing
from the plentiful pool of low-wage workers and at the same time, to hold down their
single largest cost. The ability of the industry to continue to do both may be in
jeopardy because it seemingly has had to bid up wages to attract staff while competing
with other employers for the dwindling supply of available workers during the longest
economic expansion in the nation’s history.
Nonetheless, workers in the child care industry earned just 63 cents for every
dollar earned by all workers on average in 2000. Among preschool teachers, the
portion of the child care workforce that typically has a bachelor’s degree, median
earnings in 1999 were $8.41 an hour — considerably less than other workers with a
college diploma. The $6.91 an hour earned by other child care workers also was
below the pay of many jobs with similar short-term on-the-job training requirements.
These very low wages as well as the small chance of getting a better-paying position
in the field by undertaking further education/training and the stressful nature of the
work likely contribute to the high rate of turnover among child care staff.
Although a low-paid workforce makes child care more affordable for parents,
frequent job turnover inhibits the development of a stable youngster-caregiver
relationship, which is one input for good quality care. The wages of the child care
workforce also appear to be positively related to the quality of care provided.
Initiatives consequently have been undertaken to increase the compensation of child
care personnel. These efforts most often focus on raising the quality of child care by
improving the credentials of caregivers — and secondarily their pay — through such
means as training, professional development, scholarships and loan forgiveness. The
strategy of directly increasing the compensation of the child care workforce, through
retention grants or wage supplements, for example, is less often used. Governments,
advocacy groups, labor unions and the business community, among others, have
sometimes worked together and at other times worked separately to improve, either
directly or indirectly, the compensation of child caregivers.

Contents
Some Basic Facts About the Child Care Workforce . . . . . . . . . . . . . . . . . . . . . . 3
Job Growth and Turnover Among Child Caregivers . . . . . . . . . . . . . . . . . . . . . . 5
Child Caregiver Wages and Wage Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Initiatives to Improve the Compensation of the Child Care Workforce . . . . . . . 15
List of Tables
Table 1. Employment in Child Care Occupations, 1992-2000 . . . . . . . . . . . . . . 6
Table 2. Employment in the Child Care Services Industry, 1972-2000 . . . . . . . . 7
Table 3. Child Care Employment by Occupation and Industry,
1998 (actual) and 2008 (projected) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The Child Care Workforce
Perhaps one of the most dramatic changes in the composition of the labor force
during the last century was brought about by women increasingly engaging in paid
employment. Over the past few decades, married mothers with children —
particularly young children — have fueled much of the increase in female labor force
participation. Recently (1990-2000), the share of women in married-couple families
who had children under age 5 and who were members of the labor force grew from
58% to 62%. Similarly, 76% of mothers with 5-14 year olds in married-couple
families were members of the labor force in 2000, up from 72% in 1990.1
The now commonplace presence in the labor force of married mothers with
young children in part underlay congressional passage of welfare reform in 1996.
That is to say, policymakers questioned why poor single mothers of young children
shouldn’t be induced to work if so many non-poor married mothers currently are
employed. The Personal Responsibility and Work Opportunity Reconciliation Act of
1996, in turn, reinforced the trend toward greater maternal employment through its
implementation of work requirements for adult beneficiaries — primarily single
mothers — of the Temporary Assistance for Needy Families (TANF) program.
The heightened involvement of women in the labor force likely has decreased the
availability of informal caregivers (e.g., neighbors, friends and relatives) and sparked
a more widespread need for child care services that can be purchased in the
marketplace. In 1995, according to the latest published data from the U.S. Census
Bureau, 41% of employed women with children under age 15 paid someone to look
after their children. In 1986, the comparable figure was 31%.2 The cost of child care
consequently has become an integral component of more families’ budgets over the
years.
Since the mid-1990s, the affordability of child care has become particularly
important to growing numbers of low-income mothers as they leave the TANF rolls
for jobs.3 In 1997, the child care expenses of working families with youngsters under
1U.S. Bureau of Labor Statistics. Unpublished data from the March 1990 and March 2000
Current Population Survey.
2U.S. Bureau of the Census. Who’s Minding the Kids? Child Care Arrangements. P70-70,
Fall 1995. (Hereafter cited as U.S. Bureau of the Census, Who’s Minding the Kids.)
3For one estimate of the impact of child care costs and subsidies on the incomes of mothers
leaving the welfare rolls see: Meyers, Marcia K., with Wen-Jui Han and Irwin Garfinkel.
Child Care in the Wake of Welfare Reform: The Impact of Government Subsidies on the
Economic Well-Being of Single-Mother Families. Social Service Review, March 2001.

CRS-2
age 13 who used paid care averaged 9% of earnings.4 Low-earning families devoted
substantially more of their paychecks to this purpose: child care costs absorbed 16%
of the wages of families that earned 200% or less of the applicable poverty threshold
in 1997. The figure for comparable families with higher earnings was 6% on average.5
Congress passed legislation which recognizes that the affordability of child care
can affect a mother’s likelihood of working outside the home.6 The two largest
federal programs enacted to subsidize work-related child care expenses are the
Dependent Care Tax Credit and the Child Care and Development Block Grant
(CCDBG). The non-refundable credit, available to families with federal income tax
liabilities, offsets a portion of market-based, employment-related costs incurred for
the care of certain dependents, including children less than 13 years of age.7
However, low-income families (e.g., those receiving TANF benefits) are less likely
than other families to make use of the credit because they more often have no or low
income tax liabilities and more often rely on informal child care arrangements.8 The
CCDBG is intended to enhance not only the affordability, but also the availability and
quality of child care services provided to children under age 13 living in low-income
families in which a parent is either working or attending school. Child care assistance
is not an individual entitlement, and relatively few eligible children receive the subsidy
(e.g., 12% of federally eligible children in 1999).9 The CCDBG rules and funding are
scheduled for reauthorization in 2002.10 Other proposals have been introduced during
the 107th Congress to increase the availability and quality of child care services. (For
4Giannarelli, Linda, and James Barsimantov. Child Care Expenses of America’s Families.
Occasional Paper Number 40, Assessing the New Federalism. The Urban Institute,
Washington, D.C., December 2000. Note: Working families are defined as those in which
the adult most knowledgeable about the children under age 13 is employed and reports using
child care while at work. Typically, the individual is the mother who either has no
spouse/partner or has a spouse/partner who also is working.
5For additional information on the cost of child care see: Schulman, Karen. The High Cost
of Child Care Puts Quality Care Out of Reach for Many Families. Children’s Defense Fund,
2000.
6See for example: Lemke, Robert J., with Ann Dryden Witte, Magaly Queralt and Robert
Witt. Child Care and the Welfare to Work Transition, Working Paper 7583. Mass.,
National Bureau of Economic Research, March 2000; Kimmel, Jean. Child Care Costs as
a Barrier to Employment for Single and Married Mothers. The Review of Economics and
Statistics, v. 80, no. 2, May 1998.
7P.L. 107-16, enacted in 2001, most recently amended the credit. For more information see:
CRS Report RL30973, Tax Cuts: A Side-by-Side Comparison of the President’s Proposal
and the House, Senate, and Conference Committee Bills, by David L. Brumbaugh, Jane G.
Gravelle, Steven Maguire, Louise Alan Talley, and Bob Lyke.
8U.S. Bureau of the Census. Who’s Minding the Kids. In 1995, 33% of poor families as
opposed to 41% of nonpoor families used paid child care.
9U.S. Department of Health and Human Services. Administration of Children and Families.
New Statistics Show Only Small Percentage of Eligible Families Receive Child Care Help.
HHS News, December 5, 2000.
10For more information see: CRS Report RL30785, The Child Care and Development Block
Grant: Background and Funding, by Alice Butler and Melinda Gish.

CRS-3
information on these proposals, see CRS Report RL30944, Child Care Issues in the
107th Congress.)
The possibility of achieving an ample supply of good quality child care at
affordable prices is in part linked to conditions in the labor market for child
caregivers, which is the focus of this report. After defining the characteristics of those
who comprise the child care workforce, the report analyzes the actual and projected
employment pattern of paid child caregivers. The earnings of the child care
workforce are next examined. The report closes with a review of existing initiatives
intended to improve the wages and benefits of the child care workforce.
Some Basic Facts About the Child Care Workforce
The responsibilities of child caregivers are to nurture and teach preschool-age
children as well as to look after older children while their parents pursue other
activities (e.g., jobs or school). Child care arrangements vary in the degree to which
workers attend to the basic physical needs of their charges or engage in activities
meant to develop youngsters’ intellectual, emotional and social skills. These
differences in the duties of child care personnel are in part related to the age of the
youngster and to the qualifications of the worker.11 (See Figure 1 for the definition
of the paid child care workforce.)
The education/training qualifications of workers who care for young children
vary greatly. Child care employees of centers and preschools, for example, typically
are able to acquire the requisite skills for average job performance through up to one
month of on-the-job experience or instruction (i.e., short-term on-the-job training).
In contrast, a prerequisite for preschool teachers typically is a college education. This
wide variation in qualifications accords with state licensing requirements that range
from high school graduation, to taking community college courses, to graduation
from college with a major in child development or early childhood education.12
Private employers, local governments and publicly funded programs may require that
child care staff possess credentials greater than those imposed by a given state.
The jobs are considered to be physically and emotionally taxing. Workers often
must engage in strenuous activities (e.g., bending, stooping or lifting) while caring for
their charges. The jobs are stressful as workers need to be constantly alert in order
to anticipate trouble and to effectively deal with disruptive children.
11Unless otherwise noted, this section is drawn from the U.S. Bureau of Labor Statistics
(BLS), Occupational Outlook Handbook, and related material developed by the BLS’s Office
of Employment Projections, available at [http://stats.bls.gov/emphome.htm].
12State regulations related to the child care industry also may cover such things as
health/safety rules (e.g., physical space and immunization requirements), maximum number
of children being cared for and minimum staff-to-child ratios. The specifics of the regulations
usually differ by mode of care, and some organizations (e.g., small family day care homes)
may be exempt from them.

CRS-4
Figure 1. Definition of the Paid Child Care Workforce
In this report, the terms “child care workforce” and “child caregivers” encompass
workers such as nannies, au pairs and sitters who look after youngsters in their
parents’ homes (i.e., private household child care workers), workers who look after
youngsters in the caregivers’ homes (i.e., family child care providers), preschool
teachers and early childhood teachers’ assistants. The latter two occupations
typically are found in centers, public or private schools and religious institutions.
The available data sources differ in how they present information on these
occupations (e.g., one source combines preschool teachers with kindergarten
teachers and another source has an occupation called “child care workers” that
essentially is a combination of family child care providers and early childhood
teachers’ assistants). For reasons of data availability, the child care services
industry — which includes all occupations found in the industry (e.g., managers,
cooks and janitors), not just caregiving occupations — sometimes serves as a proxy
for the child care workforce. The industry excludes some child caregivers,
however (e.g., private household child care workers and certain family child care
providers).
The hours of child caregivers vary, depending in part on their place of
employment. Child care centers that are not under the auspices of schools typically
are open year round. Center-based employees put in long daily hours to enable
parents to leave their children before their own workdays start and to retrieve them
after their workdays end. The centers, which may be independent enterprises, church-
affiliated or employer-sponsored, often use both full-time and part-time employees
who work staggered shifts in order to be staffed the entire day. Public and private
preschool programs (e.g., Head Start) also employ a combination of full-time and
part-time workers, but they usually are open only during the 9- or 10-month school
year. Preschool teachers in center- and school-based programs typically spend
uncompensated time beyond their scheduled hours to do such things as meet with
parents and plan curriculum. Individuals who offer care in their own homes (i.e.,
family child care providers) are largely self-employed13 and thus can have flexible
hours and daily routines, but they usually work very long hours or odd hours to
accommodate the schedules of parents who work nights or weekends, for example.
The child care workforce is employed part-time much more often than other
labor force participants. In a ranking of occupations by the prevalence of persons
working less than 35 hours a week, the BLS places child caregivers in the top quartile
(i.e., occupations in which more than 27% are employed part-time). According to a
CRS tabulation of data from the Current Population Survey (CPS), about 40% of
13In 2000, 95% of family child care providers were self-employed (433,000 out of 457,000)
according to unpublished data from the Current Population Survey (CPS).

CRS-5
child caregivers in 2000 worked part-time compared to about 24% of workers across
all occupations.14
Child caregivers are self-employed to a greater extent than other workers as well.
About one-fourth of the child care workforce in 2000 was self-employed, in sharp
contrast with under one-tenth of all workers in the civilian economy. Self-
employment is highly concentrated in one occupation, namely, family child care
providers.15 The numerous family child care homes and independently run centers
reflects the ease of setting up a child care business vis-a-vis other kinds of enterprises
(e.g., the relatively low capital investment and the comparatively limited
education/training needed to enter the field).
The child care workforce also tends to be fairly young. Its median age in 1998
was 36 compared to 39 for all workers. More child caregivers are less than 20 years
old (8% as against 5%), which in part reflects the occupations’ relatively limited
education/training requirements.
In addition, the child care workforce is predominantly female. Women
constituted almost all family child care providers (98%), private household child care
workers (98%), early childhood teachers’ assistants (95%) and preschool/
kindergarten teachers (99%).16 In marked contrast, women accounted for 47% of all
employed persons in 2000.17
Job Growth and Turnover Among Child Caregivers
Demand for paid child care services, as measured by changes in caregiver
employment, increased relatively rapidly in recent years. Based on the statistics in
Table 1, the number of child caregivers grew more than the number of workers across
all occupations (18% and 14%, respectively) between 1992 and 2000. The average
employment gain for all child care occupations was pulled down by the 24% decrease
among private household child care workers (e.g., nannies). The relatively largest
employment increase occurred among family child care providers, who experienced
a 42% gain between 1992 and 2000.18 Employment of preschool/kindergarten
teachers expanded by 29% and employment of early childhood teachers’ assistants,
by 23%.
14The prevalence of part-time employment varies among the groups that comprise the child
care workforce. Relatively more persons who look after youngsters in parents’ homes or who
provide care at centers work fewer than 35 hours a week (about 50%) compared to family
child care providers and preschool/kindergarten teachers (about 30%).
15According to unpublished CPS data, 98% of all self-employed child caregivers in 2000 were
family child care providers (or 433,000 out of 443,000).
16Data are not collected separately in the CPS for preschool versus kindergarten teachers.
17BLS. Employment and Earnings, January 2001.
18Data first became available in 1992 for this subset of the child care workforce.

CRS-6
Table 1. Employment in Child Care Occupations, 1992-2000
(numbers in thousands)
Child care occupations
Early
Private
All
Teachers,
childhood
household
Family
occupa-
preschool and
teachers’
child care
child care
Year
tions
Total
kindergartena
assistantsb
workers
providers
1992
118,492
1,558
484
390
362
322
1993
120,259
1,587
504
424
355
304
1994
123,060
1,626
496
416
286
428
1995
124,900
1,692
498
396
312
486
1996
126,708
1,685
543
387
276
479
1997
129,558
1,779
574
432
260
513
1998
131,463
1,803
586
453
278
486
1999
133,488
1,873
600
509
295
469
2000
135,208
1,838
626
480
275
457
Source: U.S. Bureau of Labor Statistics. Current Population Survey.
Note: Data for all these child care occupations were not available before 1992.
a In 2000, according to data from the Occupational Employment Survey, preschool teachers
accounted for 65% of the combined teacher group.
b Early childhood teachers’ assistants, like preschool teachers, principally are employed by day care
centers, schools and religious institutions.
An even greater increase in demand for child care services can be inferred from
industry data. (See Table 2.) Over the same period (1992-2000), jobs in the child
care services industry grew almost 3 times faster than jobs across all nonfarm
industries (58% and 21%, respectively).19 Over a longer time frame (1972-2000),
employment in the child care services industry increased 5 times faster than the all-
industries’ average (388% and 79%, respectively).
19Employment in the child care services industry covers not only the occupations of child care
worker, preschool teacher and early childhood teachers’ assistant but also such others as
manager, cook, janitor and bus driver. See the note in Table 2 for those child care
arrangements that are included in/excluded from the child care services industry.

CRS-7
Table 2. Employment in the Child Care Services Industry,
1972-2000
(numbers in thousands)
Year
Child care services
All nonfarm industries
1972
146
73,675
1973
151
76,790
1974
172
78,265
1975
199
76,945
1976
215
79,382
1977
245
82,471
1978
285
86,697
1979
303
89,823
1980
299
90,406
1981
290
91,152
1982
282
89,544
1983
284
90,152
1984
292
94,408
1985
310
97,387
1986
322
99,344
1987
333
101,958
1988
356
105,209
1989
378
107,884
1990
391
109,403
1991
417
108,249
1992
451
108,601
1993
473
110,713
1994
515
114,163
1995
563
117,191
1996
565
119,608
1997
576
122,690
1998
621
125,865

CRS-8
Year
Child care services
All nonfarm industries
1999
680
128,916
2000
712
131,759
Source: U.S. Bureau of Labor Statistics. Establishment Survey.
Note: The child care services industry includes establishments primarily engaged in the care of
infants or children, or in providing prekindergarten education (e.g., child care and preschool centers
and nursery schools; family child care homes are included only if the provider has employees).
Establishments in the industry generally care for preschoolers, but may care for older children when
they are not in school. The child care services industry does not cover Head Start centers operating
in conjunction with elementary schools, establishments providing baby-sitting services or private
households employing in-home child care.
Although child care employment is projected to continue growing at an above-
average rate for the next several years, demand could moderate compared to the trend
over the last 2 decades because the pace of demographic changes that spurred past
increases in child care enrollments is likely to slow. For example, the BLS expects
women of childbearing age to comprise a smaller share of the labor force and their
rate of labor force participation to rise less rapidly in the near-term than during earlier
periods. The number of preschool children also may not increase very much in the
next several years, further dampening demand for child care services. Nonetheless,
employment of child caregivers is projected to continue growing comparatively
quickly under the presumption that an increasing share of youngsters will attend early
childhood education and care programs — particularly if parents think these programs
benefit their offspring and if government continues to directly fund or otherwise
subsidize them.20
The number of child care workers (excluding private household workers) across
all industries in which they are employed is projected to expand by 26% between 1998
and 2008. (See Table 3.) In contrast, the BLS expects employment growth across
all occupations and industries to average 15%. The shift among parents in favor of
center-based arrangements is reflected in the faster pace of job gains anticipated
among child care workers and preschool teachers employed in the day care services
industry (39% and 33%, respectively). By comparison, the rate of increase among
child care workers who are self-employed (i.e., largely operators of family child care
homes) could be considerably less (21%).
20Studies have shown an inverse relationship between the price and use of paid child care
arrangements. By lowering the price that parents pay, such government programs as the
Dependent Care Tax Credit and the CCDBG promote the utilization of paid child care
assistance.

CRS-9
Table 3. Child Care Employment by Occupation and Industry,
1998 (actual) and 2008 (projected)
1998 Employmenta
2008 Employment
Change
Occupation
Percent
Percent
by largest
distri-
distri-
Per-
industries
Number
bution
Number
bution
Number
cent
Total
1,556,494
100.0
1,786,968
100.0
230,474
14.8
Child care
904,542
58.1
1,140,588
63.8
236,047
26.1
workersb
Self
493,723
31.7
598,957
33.5
105,234
21.3
employed
Day care
173,863
11.2
240,878
13.5
67,015
38.5
services
Education
53,820
3.5
60,287
3.4
6,467
12.0
(public &
private)
Religious
51,002
3.3
57,882
3.2
6,880
13.5
institu-
tions
Child care
306,377
19.7
209,157
11.7
-97,220
-31.7
workers,
private
household
Preschool
345,575
22.2
437,223
24.5
91,648
26.5
teachers
Day care
192,827
12.4
256,936
14.4
64,109
33.2
services
Education
63,655
4.1
70,944
3.9
7,289
11.5
(public &
private)
Religious
51,907
3.3
58,611
3.3
6,704
12.9
institu-
tions
Source: U.S. Bureau of Labor Statistics, Office of Employment Projections (which relied on data
from the Occupational Employment Survey (OES), supplemented by data from the CPS).
a The disparity in child care employment for 1998 found in Tables 1 and 3 relate to the CPS
querying individuals and the OES querying employers and to differences in the occupational
classification systems of the CPS and the OES (e.g., in contrast with the OES, the CPS does not
categorize preschool teachers separately from kindergarten teachers).
b This occupation is a combination of self-employed (family) child care providers and child care staff
comparable to early childhood teachers’ assistants from the CPS.

CRS-10
The need for child caregivers is likely to remain strong not only because of
growing demand for their services but also because numerous workers regularly leave
the occupation. In each year of the 1998-2008 projection period, an average of
329,000 positions for child care workers (excluding private household workers) could
become available due to a combination of employment growth and the need to replace
persons who change occupations, retire or otherwise leave the labor force (e.g., return
to school or start a family). Similarly, an average of 42,000 positions for preschool
teachers could develop each year for both these reasons.21 As shown in Table 3,
employment of private household child care workers is projected to decrease by
97,220 jobs between 1998 and 2008; however, 115,000 positions could open up
annually, on average, because of the frequent departure of employees from the
occupation.
Looking at actual as opposed to projected experience, 30% of child care workers
(excluding private household workers) left the occupation between 1995 and 1996.
The separation rate (i.e., occupational turnover rate) for child care employees in
private households was an even higher 45%. Across all occupations, in contrast,
occupational turnover averaged a substantially lower 17%.22
The share of preschool teachers who left their occupation between 1995 and
1996 was much lower (8%) than commonly reported figures of turnover. A possible
explanation for the difference is that while preschool teachers frequently go from one
employer to another (i.e., job turnover), they may not as often change occupations
(i.e., occupational turnover).23 According to a longitudinal survey of day care centers
in three California communities, the job turnover rate among preschool teachers
between 1996 and 2000 was 75%, but 42% of the teachers who left their employers
moved from one center to another (i.e., they did not leave the occupation).24
A compendium of data on job turnover among child care staff in numerous
geographic areas shows that between 20% and 39% of center-based teachers left their
positions in 1999 or 2000 in six California counties. Turnover in 2000 among center-
based teachers was 32% in Idaho, 29% in Iowa and 20% in Maine. The job turnover
rate among this group of preschool teachers was between 34% and 42% in six
counties in North Carolina in 1999 or 2000. The rate among teachers’ assistants at
21U.S. Bureau of Labor Statistics. Occupational Projections and Training Data. Bulletin
2521. May 2000.
22Ibid.
23BLS estimates occupational separation rates but not job turnover rates.
24Center for the Child Care Workforce and Institute of Industrial Relations, University of
California-Berkeley. Then and Now: Changes in Child Care Staffing, 1994-2000.
Washington, D.C. 2001. (Hereafter cited as Center for the Child, Then and Now.) Note: In
total, 51% of the teaching staff that left their positions between 1996 and 2000 continued
working with young children: 42% of job leavers were teachers and 1% were directors who
switched centers; 1% of job leavers became nannies; 2.5% went to work for child care
agencies (e.g., resource and referral services); 4% opened up family child care businesses and
7% became elementary school teachers. The remaining 49% of job leavers either went into
non-child related employment (21%) or they were looking after their own children full-time
(15%), attending school full-time (4%) or retired (2.5%).

CRS-11
child care centers typically was higher than that of teachers in those instances for
which data were available for the two occupations in the same areas.25 Even at good
quality centers, turnover among teaching staff could well be high (e.g., an average of
30% in 1999-2000 at accredited or highly rated day care centers in three California
communities).26
Some regard the frequent job turnover of child care personnel as a matter of
concern for the following reasons:
! There is a link between child outcomes and the quality of care as measured by
continuity of the youngster-caregiver relationship, among other factors. “It is
not a coincidence that the high-quality intervention programs that have
generated positive developmental effects have employed highly qualified staff
and experienced virtually no teacher turnover.”27
! In addition, parents must repeatedly take time to make new child care
arrangements if their in-home caregivers leave, if their family day care
providers go out of business or if centers close or cutback on the number of
youngsters they can handle due to vacancies arising from staff departures.28
Unstable child care arrangements can jeopardize parents’ ability to keep their
jobs and interfere with their productivity as well.
! Moreover, as child care operators must spend time and money repeatedly
recruiting new employees, failure to retain staff may not only lower the quality
of care for children but it also may raise the prices charged parents.
The high turnover rates of child care staff could be associated with the short
career ladder that affords them little upward mobility through additional
education/training and thereby little opportunity to improve their wages while staying
in the field. The physical and stressful nature of the work, including the isolation
reportedly felt by family child care providers, also could prompt caregivers to look
elsewhere for employment. Some people may become family child care providers to
earn money while staying home to look after their own young children. They thus
regard the job as a temporary one and intend to move into other occupations once
their own children reach a certain age.29 Perhaps most importantly, the higher pay of
many other fields likely drains the ranks of the child care workforce.
25Center for the Child Care Workforce. Current Data on Child Care Salaries and Benefits
in the United States. Washington, D.C. 2001. (Hereafter cited as Center for the Child Care
Workforce, Current Data on Child Care Salaries and Benefits.)
26Center for the Child, Then and Now.
27National Research Council and Institute of Medicine. From Neurons to Neighborhoods:
the Science of Early Child Development. Washington, D.C., National Academy Press, 2000.
p. 315.
28According to Center for the Child, Then and Now, one-third of the center-based teachers
who left their jobs and took positions at other centers had worked at centers that closed
between 1996 and 2000.
29Mueller, Charles W., and Lisa Orimoto. Factors Related to the Recruitment, Training, and
Retention of Family Child Care Providers. Child Welfare, v. 74, November/December 1995.

CRS-12
Child Caregiver Wages and Wage Growth
Workers who care for young children are very low paid. In 1999, the median
earnings of child care workers were $6.91 an hour.30 Compared to the approximately
114 occupations that BLS found to have the same education/training requirements
(i.e., short-term on-the-job training), child care workers bring home small paychecks.
For example, service station attendants had median earnings in 1999 of $7.11 an hour;
food preparation workers, $7.23; retail salespersons, $7.66; crossing guards, $7.70;
nursing aides, orderlies and attendants, $8.29; tellers, $8.60; receptionists and
information clerks, $9.26; reservation and transportation ticket agents and travel
clerks, $10.74; and payroll and timekeeping clerks, $12.37. If child care workers are
instead compared to the other occupations that comprise the “personal care and
service” occupational group, they retain their low-paid designation: of the 29 out of
31 occupations in the personal care and service classification for which median hourly
wage data are available, just six earned less than child care workers.31
Preschool teachers — whose median wage in 1999 was $8.41 an hour — are
paid less than some of the above-mentioned occupations that have much more limited
education/training requirements. They also do not earn much more than other
members of the child care workforce, which suggests that preschool teachers are not
greatly rewarded for their investment in additional education.
Preschool teachers’ average earnings of $19,610 in 1999 do not compare
favorably with the approximately 74 occupations having the same educational
qualifications (i.e., a bachelor’s degree) such as recreational therapists ($29,280);
child, family and school social workers ($31,720); interior designers ($38,360); public
relations specialists ($40,780); training and development specialists ($41,510); and
insurance sales agents ($47,690).32 If, instead, preschool teachers are compared to
the other occupations that comprise the “education, training and library” occupational
group, their low-paid status is maintained: of the 55 occupations in the category, just
one had earnings below those of preschool teachers — teacher assistants at $17,400.
In contrast, kindergarten teachers (who often are public employees and may be
30BLS. Occupational Employment and Wages in 1999 Based on the New Standard
Industrial Classification System. USDOL 00-368, December 20, 2000. (Hereafter cited as
BLS, Occupational Employment and Wages in 1999.) Note: When the OES changed to the
Standard Occupational Classification system in 1999, private household child care workers
became part of the “child care workers” occupation.
31The lower paid occupations were gaming dealers ($6.20), ushers/lobby attendants/ticket
takers ($6.26), amusement and recreation workers ($6.55), manicurist/pedicurist ($6.70),
shampooers ($6.29) and baggage porters/bellhops ($6.84).
32Because many occupations whose education/training requirement is a bachelor’s degree are
usually paid on an annual basis, only their average (mean) yearly salary is reported in the
OES. However, for employees in occupations that are paid an hourly rate (e.g., preschool
teachers), the BLS constructs annual earnings by multiplying the average hourly wage by
2,080 hours (40 hours per week x 52 weeks). If hourly paid employees work less than full-
time year-round, their estimated annual earnings from the OES will overstate their actual
earnings. As this is the case for preschool teachers, their actual earnings probably compare
even less favorably than shown above.

CRS-13
covered by collective bargaining agreements) had annual earnings of $36,770 or
nearly twice that of preschool teachers.33
Very limited information on the earnings of family child care providers is
available.34 The average annual income of family child care providers ranged from
$7,374 to $10,000 in two California counties in 2000. The average gross annual
enrollment revenue for family child care providers in the District of Columbia was
$18,011. The average annual salary of these largely self-employed workers in
Maryland was $18,503. In five North Carolina counties, the median wage of family
child care providers ranged from $4.08 to $6.30 per hour.35
The heightened demand for market-based child care services — as demonstrated
by the increased share of families with employed mothers who pay for child care
assistance and the above-average pace of job growth among child caregivers — also
is visible in their relative wage trend. The earnings of employees in the child care
services industry rose from an average of $2.13 an hour in 1972 to $8.66 an hour in
2000, or by 306%.36 Average hourly earnings across all private nonfarm industries
went from $3.70 in 1972 to $13.75 in 2000, for a comparatively smaller increase of
272%. Despite their above-average wage gain, workers in the child care industry
earned 63 cents for every dollar earned by all workers on average in 2000.
The real (inflation-adjusted) wages of workers — particularly those at the
bottom of the earnings distribution such as child caregivers — declined from the
1970s through the early 1990s. Consequently, child care centers and family day care
homes were able to hold down their single largest cost.37 Some have argued that
the low wages of [child care staff] constitute supply subsidies — in effect, they
comprise a labor donation [to the cost of providing child care services], as
33BLS, Occupational Employment and Wages in 1999.
34Neither the OES nor the CPS yields information on the earnings of most family child care
providers. The two surveys provide wage data for wage-and-salary workers, but recall that
95% of family child care providers are self-employed.
35Center for the Child Care Workforce, Current Data on Child Care Salaries and Benefits.
36BLS. Current Employment Survey (CES). Note: A drawback of CES earnings data is that
all persons employed in an industry regardless of occupation are included. However, the OES
does not provide a long time-series on earnings by occupation. In addition, the monthly CPS
does not provide an accurate reflection of wages for child care workers as it covers only full-
time wage-and-salary workers; as previously noted, a well above-average share of child care
staff are employed part-time.
37Labor costs (i.e., wages and benefits) averaged 70% of total monthly costs per child at
centers and 64% at family child care homes, according to data from the Cost, Quality, and
Child Outcomes in Child Care Centers study and from the Study of Children in Family Child
Care and Relative Care reported by Suzanne W. Helburn and Carollee Howes in Child Care
Cost and Quality. The Future of Children, v. 6, no. 2, summer/fall 1996. (Hereafter cited
as Helburn and Howes, Child Care Cost and Quality.) See also: Morris, John R. Market
Constraints on Child Care Quality. The Annals of the American Academy of Political and
Social Science. May 1999.

CRS-14
[caregivers] are forgoing the higher wages they could presumably earn in another
occupation based on their education, gender, age, and other characteristics.38
The “forgone earnings subsidy” could perhaps have reduced the total cost per child
at centers by some 20%. The wage penalty for being in the child care field rather than
in other occupations was estimated to be about $5,200 a year for preschool teachers
and about $3,600 a year for assistant teachers. However, these forgone earnings may
be overstated for two reasons. First, the researchers did not have data on the prior
labor market experience of the similarly educated women of the same age, race/ethnic
origin and marital status with whom female child caregivers were compared in order
to derive the wage estimates. If the other women had spent more time in the labor
market than had child care personnel, the pay gap and hence the labor subsidy would
have been smaller than estimated. Second, the analysis did not take into account
benefits derived by caregivers that may not have been available to otherwise
comparable workers. One example of such benefits is discounts on child care that
centers commonly provide to their employees. The discounts could not only reduce
the size of the penalty for being in the child care workforce but also help to explain
why mothers are willing to accept jobs in this low-paying field. Child care staff also
might get nonmonetary benefits (e.g., enjoyment from working with children) that
offset the occupations’ low wages and effectively narrow the wage differential.39
The ability of employers to continue to meet parents’ increasing demand for child
care services by drawing from the pool of low-wage workers may be in jeopardy,
however. The 9% increase in the average real wage of employees in the child care
industry between 1993 and 2000 suggests that employers had to bid up wages to
attract staff as they competed with other employers for the diminishing supply of
available workers during the longest economic expansion in the nation’s history.40 In
contrast, the average real wage for all workers in the private nonfarm sector rose by
a slightly lower 7%, according to BLS. “As the [child care] industry expands or
improves quality, or if [as has been the case during much of the 1990s] the national
labor market tightens, it may be naive to expect more and more women to continue
to work for these lower wages” despite centers’ provision of employee discounts for
child care or any predilection among women toward the field.41
If child care employers try to pass on higher labor costs to parents by raising
fees,42 they risk bumping up against the constraint of family budgets. Parents could
38Helburn and Howes, Child Care Cost and Quality, p. 71.
39Helburn, Suzanne W. (ed.) Cost, Quality, and Child Outcomes in Child Care Centers,
Technical Report. Denver, University of Colorado, 1995.
40Calculated by CRS based on the nominal hourly earnings of workers in the child care
services industry and the Consumer Price Index for Urban Wage and Salary Workers.
41Helburn, Suzanne W., with Carollee Howes, Debby Cryer and Sharon Lynn Kagan. Cost,
Quality, and Child Outcomes in Child Care Centers, Public Report. Denver, University of
Colorado, 1995. p. 43. (Hereafter cited as Helburn, et al., Cost, Quality, and Child
Outcomes in Child Care Centers.)
42Child care center and nursery school prices (excluding provider discounts or government
(continued...)

CRS-15
well look elsewhere for less expensive child care (e.g., relatives, unlicenced providers
or small family day care homes that are exempt from regulation) or some mothers
could withdraw from the paid labor force. This falloff in demand would likely prompt
higher wage organizations to cutback their services. Given the positive relationship
between staff wage levels and the quality of care,43 the child-care-cost/family-budget-
constraint dilemma could mean a reduction in the availability of better quality centers
and preschools. Alternatively, child care is a very competitive industry and employers
may have difficulty passing along their rising labor costs to parents. Once again,
higher wage organizations might have to curtail operations and thereby reduce the
supply of better quality services. Thus, it could prove difficult to attain an adequate
quantity of good quality child care at prices that families can afford.
Initiatives to Improve the Compensation of the
Child Care Workforce
Arguments to increase the compensation of the child care workforce typically
are framed in relation to raising the quality of services provided. As mentioned at the
outset of this report, the federal government provides funds for quality improvement
in the Child Care and Development Block Grant (CCDBG). In 1995, before the
passage of welfare reform legislation, $66 million went toward this purpose and 80%
was used for resource and referral, monitoring, and training and technical assistance.
“Efforts to improve staff compensation, which many view as an important
accompaniment of efforts to improve staff qualifications via training, received 1
percent of the quality funds.”44 Since then, the size of the block grant has increased
greatly and states are required to devote at least 4% of their CCDBG expenditures
each fiscal year to activities intended to raise the quality and supply of child care.
Current information neither is readily available on the share of the grant that actually
is going toward improving the quality of child care — including the wages and
benefits of child caregivers — nor on the specific quality-related activities being
funded.
An Urban Institute summary of state programs and proposals to raise child care
workers’ compensation groups initiatives according to whether they indirectly or
directly take aim at conditions in the labor market. An indirect strategy is meant to
42(...continued)
subsidies) advanced by 38% between 1993 and 2000, according to the Consumer Price Index
(CPI) for Urban Consumers. (This CPI component became available in the 1990s.)
43Helburn, et al., Cost, Quality, and Child Outcomes in Child Care Centers; and Phillips,
Deborah, with Debra Mekos, Sandra Scarr, Kathleen McCartney and Martha Abbott-Shim.
Within and Beyond the Classroom Door: Assessing Quality in Child Care Centers. Early
Childhood Research Quarterly, v. 15, issue 4, 2000. Note: Many factors have been shown
to affect the quality of child care, some to a greater degree than others. For example, Phillips,
et al. demonstrate that teacher wages and parent fees more strongly affect the quality of
center-based care than do teacher-to-child ratios, teacher training and group size.
44National Research Council and Institute of Medicine. Child Care for Low-Income
Families: Summary of Two Workshops. Washington, D.C., 1995. p. 41.

CRS-16
improve the supply of good quality child care assistance. The hoped-for, secondary
outcome is better pay and benefits for child care staff. A direct strategy looks to
compensation first. It assumes that better pay and benefits will increase the industry’s
likelihood of recruiting and retaining higher skilled workers who will provide better
quality care.45
The indirect strategy was determined to be present in 37 states and the District
of Columbia at the end of 2000. Included in this approach are training and mentoring
programs whose purpose is not only to bring new employees into the field, but also
to retain experienced child care staff to serve as mentors.46 Some of these programs
provide stipends to staff that act as mentors. In eight states and the District of
Columbia, the training programs serve an additional purpose: they are aimed at TANF
recipients; and skills learned in the programs could help these individuals move off the
welfare rolls into child care jobs.47 Money for training and mentoring programs
comes from government sources (e.g., federal funds from the TANF block grant and
state funds through the maintenance of effort provision in the 1996 welfare reform
law) and from private or corporate foundations, according to the Urban Institute
report. While some of these programs operate statewide, others are pilot projects in
select geographic areas. Another approach — professional development for
experienced caregivers — is the most often used indirect strategy. While 15 states
and the District of Columbia have training and mentoring programs, professional
development efforts were present in 25 states at the end of 2000. The availability of
scholarships, student loan assumption or forgiveness programs and financial incentives
for continuing education is meant to assist those in the occupation improve their
qualifications.48 A third approach, utilized in 19 states, is to increase reimbursements
45Twombly, Eric C., with Maria D. Montilla and Carol J. DeVita. State Initiatives to
Increase Compensation for Child Care Workers. The Urban Institute, February 2001.
46According to a U.S. Department of Labor 1998 report (Meeting the Needs of Today’s
Workforce: Child Care Best Practices), the Bureau of Apprenticeship and Training (BAT)
signed an agreement in October 1997 with the National Association of State and Territorial
Apprenticeship Directors and the Center for Career Development in Early Care and Education
to expand nationwide the BAT’s West Virginia Child Care Development Specialist Registered
Apprenticeship Program. At that time, the West Virginia program provided child care
apprentices with 4,000 hours of supervised on-the-job training and 300 hours of classroom
instruction. A “career ladder” component of the program raised the salaries of participating
child care workers as their skill, ability and knowledge increased.
47The U.S. Department of Labor (DOL) awarded $203,000 to the YMCA of the Washington,
D.C. Metropolitan Area in 2000 to train welfare recipients to become child care workers. The
program, according to a press release from the DOL’s Women’s Bureau, would follow “a
registered apprenticeship model” (see footnote 46).
48At the federal level, Congress first appropriated $1 million for FY2001 for the Child Care
Provider Loan Forgiveness Program, which was authorized by the Higher Education
Amendments of 1998 to encourage graduates with an associate or bachelor’s degree in early
childhood education to enter and remain in the early child care profession. Between 20% and
100% of the outstanding balance on eligible borrowers’ loans under the Federal Family
Education (Stafford) Loan program and the William D. Ford Federal Direct Loan program
is forgiven based on the number of consecutive years of full-time employment (i.e.,
(continued...)

CRS-17
to family child care homes and child care centers to promote enrollment of low-
income children. Although more funding for targeted subsidies could increase the
supply of services for these children, it does not automatically lead to higher pay for
caregivers. Numerous states use more than one of these indirect approaches.
Policymakers in many fewer states are willing to play a direct role in improving
the compensation of the child care workforce. At least one direct strategy was found
in 12 states and the District of Columbia at the end of 2000. According to the Urban
Institute, these initiatives rely heavily on public funds and often came into being after
advocacy groups launched strenuous campaigns. The most often used direct
approach is the retention grant, which is offered in five states to encourage child
caregivers to remain in the field. Four states, often as part of universal
prekindergarten programs, provide preschool teachers with wages comparable to
those of elementary school teachers. Some states and localities also supplement the
hourly wages of child care staff. The extra pay may be tied to a caregiver achieving
a specified level of education, experience or responsibility (i.e., the career ladder
model), or to a caregiver who will work in an underserved area or during unusual
hours. Four states take different approaches to increase the access of child care
personnel to health benefits. In two cases, the state’s employee health insurance plan
has been opened up to eligible members of the child care workforce.
The business community is involved in compensation-enhancing efforts as well,
principally through indirect approaches. Firms are members of public-private and
corporate partnerships that in part work toward improving the quality of child care
services by, for example, funding training for center staff.49 Individual companies
infrequently offer employees access to child care resource and referral services as part
of their benefit packages. The services provide information on the qualifications of
caregivers in a locality, among other things, which can help parents make more
informed decisions about child care arrangements.50 In addition to working
independently, with other firms or with state/local governments, employers also are
involved in child care quality improvement through cooperative efforts with
community groups, advocacy organizations and labor unions among others.51
48(...continued)
uninterrupted 12-month periods at 30 or more hours per week) at day care facilities that serve
low-income communities. The pilot program is available on a first-come, first-served basis
to borrowers who received loans after October 7, 1998. For more information see: Federal
Register, July 27, 2001.
49U.S. Department of the Treasury. Investing in Child Care: Challenges Facing Working
Parents and the Private Sector Response. 1998.
50In June 2000, almost 3% of private sector establishments had child care resource and
referral services as an employee benefit. Thus, 13% of employees in private industry had
access to these services, according to the BLS’ Pilot Survey on the Incidence of Child Care
Resource and Referral Services in June 2000 (Report 946, November 2000). The share of
state and local government establishments that provided these services (14%) and the share
of employees with access to these services (17%) were higher than in the private nonfarm
sector.
51See the following for information on the various ways in which private and public sector
(continued...)

CRS-18
Unions are attempting to organize child care staff and to directly increase their
compensation through the negotiation of collective bargaining agreements with
providers. Despite some notable successes, only a small share of the child care
workforce is represented by unions (perhaps 5%).52 The structure of the industry
(i.e., employees scattered across numerous small employers and worksites) makes
organizing very difficult. Moreover, “[c]hild-care workers are currently so underpaid
that they likely could not afford union dues, and staff turnover in the field is so high
as to discourage workers from committing to membership.”53 In those cases where
unions are able to organize caregivers, labor negotiators could well have difficulty
obtaining higher wages for them at the bargaining table because “[c]hild care centers’
ability to give in to demands for higher wages is limited by the competition from
family child care providers.”54 For these reasons, collective bargaining alone is
unlikely to substantially improve the earnings and benefits of the child care workforce.
In concert with other groups, labor unions are pursuing alternative strategies to
increase the pay of child caregivers (e.g., the career ladder model mentioned above).55
51(...continued)
organizations either jointly or separately finance child care programs: Mitchell, Anne, with
Louise Stoney and Harriet Dichter. Financing Child Care in the United States: An
Expanded Catalog of Current Strategies. Ewing Marion Kauffman Foundation, 2001.
(Available at [http://www.emkf.org].)
52Grundy, Lea, with Lissa Bell and Netsy Firestein. Labor’s Role in Addressing the Child
Care Crisis. New York, Foundation for Child Development, December 1999.
53Ripple, Carol. Economics of Caring Labor: Improving Compensation in the Early
Childhood Workforce. New York, A.L. Mailman Family Foundation and Foundation for
Child Development, January 2000. p. 16.
54Ibid., p. 30.
55Jacobson, Linda. Child-Care Workers Eye Unionization. Education Week, May 9, 2001.