Book Summary

Helburn, Suzanne W., & Bergmann, Barbara R. (2002). America’s Child Care Problem: The Way Out. New York: Palgrave.

• Chapter 1: The Problem: What’s Wrong with Child Care in America ?
• Chapter 2: The Question: How Could We Make Child Care Affordable?
• Chapter 3: The Design: What Should a New Child Care System Look Like?
• Chapter 4: The Yardstick: What child care deserves to be called good?
• Chapter 5: How much of America ’s child care is good?
• Chapter 6: The regulations: How much quality control is in child care?
• Chapter 7: The marketplace: What is peculiar about the child care industry?
• Chapter 8: The caregivers: How could we improve their lot?
• Chapter 9: The cost: How much would it take to provide affordability and improved quality?

Chapter 1: The Problem: What’s Wrong with Child Care in America?

Helburn and Bergmann’s book, America’s Child Care Problem: The Way Out, takes a detailed look at the child care industry, both how it stands currently and how it can and should be changed. In the first section of the book, the child care problem is defined; the question of how to make child care affordable to all is discussed, as is a potential design for a new child care sector. Several factors are identified that have contributed to the child care problem in America, primarily the movement of women into the labor force and the elimination of maternal home child care as an option for most families. In addition, single-parenthood has grown as a result of increased divorce rates and out-of-wedlock births, creating a greater demand for out of home child care. Parents need child care in order to work and financially provide for their families. The majority of child care today is private care and is purchased in the market at a high price.

Helburn and Bergmann begin by identifying two current problems, the affordability problem and the quality problem. The affordability problem speaks directly to the immense burden that the price of child care puts on families. Child care costs an average of $5,000 a year per child and sometimes as much as $10,000. High costs force parents to choose the lowest priced source of care for their children. This undermines the quality of care. Such care is often provided in unlicensed, unregulated settings by untrained providers, placing children at risk both physically and developmentally. This is the quality problem. The authors note that child care quality should be a public concern as it impacts the health and productivity of the next generation. Unfortunately the majority of care in America today is of low or mediocre quality as few parents can afford the highest quality care.

Chapter 2: The Question: How Could We Make Child Care Affordable?

Helburn and Bergmann suggest that government assistance for child care could relieve some of the financial burden that the cost of care has on families allowing them to both select higher quality care as well as use the money that would have been spent on child care to meet other economic needs.

An overview of the history of government involvement in child care assistance indicates that it was not until the New Deal that support for child care was introduced. Another federal program, developed during the 1960’s, was Head Start, which was developed for the purpose of preparing low-income pre-schoolers for school. Government assistance has typically been geared towards low-income families with the exception of public child care during World War II when women were needed to work in factories. Such public sources of care were closed when the war ended. Today there is a child care assistance program that provides a number of low-income families with child care subsidies administered at the state level with federal money from the Child Care and Development Block Grant (CCDBG). However, due to limited funding, the current subsidy system cannot meet the demand of all eligible families. In 1999, 15 billion children were eligible for child care assistance but only 1.8 billion children received it. Most of these children were from families transferring off cash-assistance benefits, leaving most low-income families struggling to find affordable child care on their own.

Helburn and Bergmann recommend an aggressive approach to dealing with the child care problem that would change the structure of child care assistance by greatly increasing federal government financing to programs administered by state and local governments in cooperation with private sector providers. The authors advocate for fully subsidized child care for families with income at or above the poverty line as well as for an affordability standard. This standard would limit family expenditures for child care to no more than 20 percent of above-poverty-level income. This would be accomplished through providing subsidies for part of the costs while parents would pay a co-payment determined by their income. For such a program to reach all families in need, it must be created on an entitlement basis that guarantees assistance to all eligible families. Such an extensive program is estimated to cost about $50 billion a year, $30 billion more than is being spent on child care assistance currently.

Helburn and Bergmann explore several sources of financial support for their proposed plan including employers, philanthropic efforts, and federal government funding. While employers will benefit from quality child care arrangements for their employees, it is unreasonable to assume that employers will voluntarily fund a $30 billion increase. This would also limit access to assistance from parents who do not work for an employer that offers child care assistance services. Although charity and philanthropic groups provide for the needy they are in no way able to provide the capacity of assistance needed for all parents. The federal government is the only source of funding that has the resources to provide for such an extensive program.

Chapter 3: The Design: What Should a New Child Care System Look Like?

The authors go on to discuss possible designs for their suggested government assistance program. Reviewed in the book is the shift from a private market approach to child care to a public provided system much like the public school system. The expansion of federally funded programs such as Head Start is reviewed positively but a complete shift away from the private child care market would endanger private providers, currently the majority, creating great opposition to the program. The authors do not favor tax-break and refund programs such as the Dependent Care Tax Credit that exists today because the financial assistance provided by such refunds is insufficient to cover all child care expenses, especially for multiple children. Such tax programs are only accessible by families who have incomes high enough to pay taxes though this may be addressed by making the tax credits refundable. There is also no guarantee that the financial assistance that families receive will be used to pay for improved quality child care for their children and not to some other need. Helburn and Bergmann conclude that a subsidy program to directly assist families in paying for child care is the best design.

The authors propose a subsidy program that would only allow licensed providers to participate. It would take the form of both vouchers and contracted slots with private providers. Vouchers provide families with the freedom to choose a child care option that best suits their needs while contracted slots at particular private providers to be assigned to children create a guaranteed child care market in areas where care may not have been provided. Another reason why the subsidy design is preferred is that it addresses the quality problem as well as the affordability problem. Limiting child care choices to those who are licensed guarantees families improved quality while encouraging non-licensed providers to become licensed. Subsidy provisions could be greater for higher quality care, which would act as an incentive for quality.

There is a controversy over whether or not parents who choose to care for their children at home should receive assistance. These authors believe that subsidies should only be provided to those families who pay for child care. Another concern around the issue of subsidies is that such a program would interfere with the market. Evidence provided in the book demonstrates that subsidies for child care take a different form than subsidies for other commodities and will not have a negative effect on the workings of the market.

Chapter 4: The Yardstick: What Child Care Deserves to Be Called Good?

Helburn and Bergmann discuss issues of quality measurement in child care and the need for policy makers to agree on a standard for high quality care. One conventional approach to quality assessment of care is the Early Childhood Environment Rating Scale (ECERS). ECERS focuses on seven dimensions of services (from personal care, to language and reasoning, to parents and staff needs) and evaluates the quality of these categories on a 7-point rating scale. In addition to the ECERS, structural measures must be recognized when rating the quality of care, including the ratio of caregivers to children, group size, staff education and training, staff turnover rate, and the quality of space. In arguing the need for a broadly inclusive, federally subsidized child care system, the authors state that it is insufficient to advocate for anything less than “good” care. Similarly, in addition to the benefit to children and their families, “good” care is valuable to society by emphasizing the reductions in future public assistance, decreased teenage pregnancy, and higher rates of employment among young adults.

Chapter 5: How Much of America ’s Child Care is Good?

With over ten million preschool children with working parents in the United States in need of child care; the quality of care has far-reaching impacts. Several types of child care are used throughout the U.S. , each with its own unique advantages and disadvantages. Child care centers (both for profit and non-profit) offer benefits such as: stability and dependability, license-mandated health and safety features, and a range of educational activities. Disadvantages include less individual attention, high fees, and inflexible hours. Studies have shown that “a considerable majority of centers are delivering care that does not deserve to be called good and that a distressing proportion provide care that is minimally acceptable or worse” (97). Family child care provides home-based care, usually at a lower cost than center care. There is often greater opportunity for individual connections and attachment. However studies suggest that poor quality is quite common in family child care (105), referring to unsatisfactory learning environments, insufficient back-up plans, and routine dodging of regulations. A third type of care includes relatives or nannies. Despite the individual attention, studies show these methods of care are often inadequate, particularly with regard to educational development and school readiness. Accessing quality care is a problem for all income ranges and types of care.

Chapter 6: The Regulations: How Much Quality Control in Child Care?

In order to make the case for federal subsidies for child care, it must be clear that government funds will be directed towards quality care. Because almost one-third of state standards are low enough to permit dangerous situations, the authors state that financial incentives for providers to improve quality are necessary. Means for enforcing and/or motivating improved quality include: higher standards for state licensing, emphasizing higher child-staff ratios, and better staff training; improved regulation of family care providers by increasing funding for licensing agencies to decrease caseloads and establish consultative services; and the use of federal funds for helping providers improve conditions and earn accreditation. However, efforts to increase quality must consider the effects on the supply of child care. Each method suggested above has its limits: higher training requirements and inspections discourage providers from getting licensed, pushing family care underground, and market pressures may motivate providers to seek out lenient accreditation agencies. Increasing reimbursement rates and subsidies for both child care providers and licensing/accreditation agencies will help the move towards a more broadly inclusive, high quality care system.

Chapter 7: The Marketplace: What is Peculiar About the Child Care Industry?

In an ideal market, there are large numbers of buyers and sellers, all well informed and acting in self-interest, which creates competition and keeps both price and quality in check. This is not the case in the child care sector for several reasons:

• Multiple consumers. Parents are not the direct consumers of care but they choose care arrangements. Children are direct consumers; high quality care is in their best interest. Research shows parents often act in their own self-interest, choosing convenience and cost over quality. Government is a 3^rd buyer; it has interest in low costs and the long-term societal benefits.
• Lack of information. Parents are often poorly informed on the aspects of quality care, and how and where to find it.
• High cost of care. Consumer choice is nonexistent for the many families who can’t afford high quality options.
• Child care is a merit good. There are multiple positive short- and long-term externalities associated with child care (increased labor productivity, reduced special education and criminal justice expenditures).
• Diversity of the industry. The child care sector consists of a mix of for-profit, non-profit, and publicly run centers, family child care providers, and informal providers. It is often hard to regulate the multiple kinds of providers to ensure quality.
• Competition is not beneficial. Care is based on the quality of interaction between the provider and child. Competitive pressures create the need to decrease costs, which ultimately means decreasing labor expenses, thereby increasing staff to child ratios or decreasing provider salary and qualifications. Plus, there are special competitive pressures on for-profit centers due to their need to turn a profit, pay taxes, and the absence of charitable and public contributions. In contrast, unregulated providers working out of their homes lack overhead expenses and often do not pay taxes.
• Provider turnover. Salaries are low, creating high turnover rates and lower caregiver educational qualifications.
• Supply gaps. Parents often face care shortages and long waiting lists, particularly for infant care and odd-hour care.
• Capital shortages. Centers and at-home providers have difficulty obtaining loans and raising capital, particularly in low-income neighborhoods.

Child Care Resource & Referral (CCR&R) agencies attempt to inform parents and providers and coordinate the system. However, there is great variation in these agencies between states, and there is no nationwide R&R network.

Policy recommendations include: an increase in reimbursement rates, funding for a nationwide CCR&R network, public contracting with centers to fill supply gaps, an increase in state and federal loan programs, and publicizing information about care quality.

Chapter 8: The Caregivers: How Could We Improve Their Lot ?

Workers in the field of early care and education (ECE) face low status, inadequate pay (median: $8.41 for preschool teachers, $6.41 for child care workers in 1999), and few employee benefits. As a result, the field has difficulty both recruiting and retaining educated caregivers; annual caregiver turnover estimates range from 36% to 52%. High caregiver turnover rates affect quality by inhibiting close caregiver-child relationships. The field remains largely uneducated; 40% of teachers in child care centers hold a high school degree or less. Furthermore, the child care workforce lacks a standardized career ladder. State regulations vary widely on the basis of caregiver educational background, and often pre-service and in-service training are predominantly the responsibilities of centers themselves. Budgets are often tight, and centers must compete with family child care providers who have less overhead costs, and therefore there is little incentive to offer training opportunities or to significantly increase wages.

The authors recommend that public funds be used to improve child care quality through a tiered reimbursement rates (based on provider education), increased training opportunities and financial assistance for education (e.g., the T.E.A.C.H. Early Childhood Program), and guarantees of certain employee benefits (e.g., health insurance). Professionalization in the child care industry, possibly including unionization and higher qualification requirements, could ultimately lead to higher pay, but this will take time. Policy makers must keep in mind that the costs of improving the staff wages and qualifications in child care could translate into higher parent fees; an expanded voucher program would make it possible to increase wages without increasing fees for low-income families.

Chapter 9: The Cost: How Much Would it Take to Provide Affordability and Improved Quality?

Currently, the child care subsidy program does not cover many families in need of financial help. In addition, the 1996 welfare reform added more low-income families to the workforce who need child care. Helburn & Bergmann present three national strategies to address this growing problem. The plans increase in magnitude and cost, and would be funded by the federal government and administered by the states.

1. An “interim” plan that covers all families eligible for the present subsidy system.
1. The Child Care Development Fund (CCDF) currently serves a small portion of eligible children. This plan would expand funding and coverage to provide subsidies to all low-income families.
2. Extend coverage from 2 million to 10 million children.
3. Benefits would be graded: No “cliff effect” (pg. 214).
4. Estimated cost (added to current spending): $12.6 billion.
2. A plan that would provide affordable care to all American families, possibly including a free full-day pre-kindergarten program.
1. Provide services to all lower-middle and middle-class families.
2. Reimbursement rates increased with care quality and provider education.
3. Estimated added cost: $26.4 billion.
3. A plan that would offer high-quality, tuition-free care for all children, regardless of family income.
1. Similar fee structure as previous plan (increased reimbursement rates for quality control) but will lack parent co-payments.
2. Estimated added cost: $102.5 billion.

Quality control is necessary for all proposed plans. The authors suggest increased regulation and inspection by state agencies, public quality evaluations of providers, financial consulting to improve capital expansion, and incentives for investment in caregiver training, estimated to cost an additional $2.25 billion per year. Helburn & Bergmann suggest raising the money through taxes, borrowing, and decreasing funding for programs with little public benefits, such as agricultural programs. Possible allies include: public school administrators, teachers, and their unions; corporations; employers; and workers with young children.

The authors emphasize the need to reframe child care as a national need.

By investing in child care, the government saves money in the long term through improved labor productivity, reduced special education expenditures, decreased social assistance, and reduced criminal behavior. Furthermore, the quality of life will improve as children and families enjoy safer and more educational care, and could act as a vehicle for curing child poverty.