Wednesday, April 25, 2012

Should we be concerned about the decline in family child care providers?

During the debates over Wisconsin's new child care quality improvement initiative, the YoungStar quality rating system, it became clear that an anticipated trade-off for quality improvement was likely to be a reduction in the number of child care providers.  The providers predicted to most likely be negatively impacted were family child care providers (who care for small numbers of children in their own home), as the new quality standards would differ dramatically from the current certification and licensing requirements for these providers. In addition, the Forum's own survey work found family child care providers to be less likely to have the financial and organizational resources needed to make significant investments in quality.  Finally, many observers felt there could be an over-abundance of family child care providers, particularly in Milwaukee County, and that increased parental demand for higher quality care might expose that reality.

In fact, according to a recent analysis by the Wisconsin Council on Children and Families (WCCF), there has been a significant decline in the number of family child care providers, as compared to years prior to YoungStar.  Statewide, there has been an 28% decrease in the number of family providers over the past seven years, including a 63% decrease in the number of certified providers, who had the least rigorous regulatory requirements prior to YoungStar.  WCCF finds the drop in family child care providers in Milwaukee County to be even more dramatic, with a 33% decline in just the past four years.

Should these results be troubling?  It's hard to say.  While there is a need to monitor whether this reduced supply in the family child care market negatively impacts child care access, to date there is no indication that parents have less access to quality care despite the reduced number of slots.  The changes may simply mean the supply has adjusted to match demand.

Conversely, at least a few child care providers feel the new regulations, coupled with the state Department of Children and Families' focus on fraud reduction, are having an unconstitutional disparate impact on African-American child care providers in Milwaukee and several have filed a federal law suit.  Although the claim does not provide statistics, it does seem possible that most of the suspended licenses and certifications were held by African-American providers.  As of March 2012, of the 281 providers listed on the website of the Department of Children and Families as suspended, the vast majority (90%) are located in Milwaukee. The state does not report the race of these providers, but the Forum's 2010 survey of child care providers found that while 10% of Wisconsin's providers are African-American, the rate increases to 48% in Milwaukee County. Thus, to the extent Milwaukee providers make up most of the suspended providers, it is likely that African-American providers are over-represented among them.  Whether this is a disparate impact and, if so, whether it is intentional will likely be difficult to prove.  However, even if no intent is found, if the perception that the state is targeting Milwaukee's African-American providers is widespread in the city, it may prove to be a significant hindrance to the state's efforts to reach out to Milwaukee parents about the importance of choosing a high-quality provider.

Another concern may arise if the family child care providers who have left the market stay unemployed or leave the labor force altogether.  The Forum found in our 2010 report, "Moving the Goal Posts: The shift from child care supply to child care quality," that the state's restructuring of the subsidy program was likely to have unintended consequences for child care providers.  We cautioned that "if this system reform is to be effective, then it is important to understand that the child care system we have today is the result of policy goals originally designed to impact the supply of care..."  Reforming welfare and creating a new child care subsidy program enabled low-income parents to join the workforce, including thousands who found new jobs as family child care providers.  The subsidy program was designed to emphasize child care supply over child care quality in order to effectuate the goals of welfare reform. It is important to recognize that these supply-oriented actions created jobs in the child care market; dramatic quality-oriented changes in the market will now affect those same jobs.  

Finally, given the fact that family child care is less expensive than center-based care, any decrease in the supply may negatively affect families who cannot afford to utilize a child care center.  YoungStar is designed to make higher quality care more affordable to low-income families by increasing the subsidy rate for higher quality care.  Whether the increase is enough to neutralize the impacts of the decreased supply in the low end of the market over the long term is yet to be seen.  For now, families appear to be able to remain the in the regulated market.  However, there remains a potential for growth in cheap, unregulated care, which should be monitored.  

1 comment:

Anonymous said...

First off we should be concerned about the decline in family child care which is happening statewide not just in Milwaukee. Given that it started long before Youngstar was implemented, the issue is far more complex than one issue and we are begiining interviews with 150 providers who closed in the past year in our service region to better understand what is happening- we also just finished working with a group of students who surveyed mainly middle income parents and found a really different approach to child care
being used by families than is normally perceived by those of us in the field. There are indications that family child care is used more by these parents when the quality is better.

The higher drop in Milwaukee county may be more due to the fact that child care regulation of certified homes and child care fraud investigation was mismanaged under the county- the Journal Sentinel never seemed to mention that in their contracts counties are responsible for investigating fraud-difficult under the weakening of child care regulation that was done under welfare reform by the Republicans but a lot of other counties stayed on top of the problem. Changes in regulatory agencies in other counties (ie shifts from county staff to non-profit agencies) often result in major drops in regulated family child care as various homes close under the better enforcement of standards. The key then is rebuilding by recruiting better providers.

The real issue here is not Youngstar but the payment system. Youngstar was not designed as an anti-fraud mechanism attached to the subsidy system. Youngstar was originally designed as a means for parents to select better care and to create incentives for providers to improve. The latter can only
work under a system based on real market rates that enable providers to make a living. This is the only state to implement a rating system that is punitive as well as having positive incentives. That was not the original intent when it was proposed by the child care community over a decade ago.