Massachusetts Child Care Market Price Survey Board of Early Education & Care March 8, 2011

1. Massachusetts Child Care Market Price Survey Board of Early Education & Care March 8, 2011 Kenley Branscome Kate Giapponi & Emma Cohen Applied Policy Analytics Public Consulting Group, Inc. Two Canal Park 45 State Street Cambridge, Massachusetts 02141 Boston, Massachusetts 02110

2. Overview of Discussion • Mandate for Market Price Surveys • Child Care Market Prices and Affordability • Scope of the Massachusetts Market Price Survey • Survey Methodology & Update on Progress • Next Steps – Planned Analyses & Reporting Page 2 Massachusetts Market Price Survey

3. Mandate for Market Price Surveys Federal Requirement & How Other States Compare • The U.S. Office of Child Care requires states to conduct a market price survey every two years as part of Child Care & Development Fund (CCDF) requirements. Purpose is to help ensure that state child care payment rates are high enough to enable families to competitively find and afford care using child care assistance • Federal CCDF rules encourage states to set reimbursement rates that are at or above the 75th percentile of prices in the private market. Viewed as a benchmark rather than a federal requirement • Both the 2006 and 2008 surveys found that the state did not meet the 75th percentile benchmark in any region for any type of care. Nationally, only six states met that benchmark in 2010. Down from nine states in 2009. (Schulman & Blank, 2010) • Closing the gap between EEC rates and the 75th percentile would be a significant challenge, given that previous surveys show most rates at or below 25th percentile* • The 2006 market price survey found that EEC rates were below the 25th price percentile for family child care in three regions, center-based infant care in three regions, toddler care in five regions, preschool care in four regions and after-school care in two regions. The results from the 2008 survey were similar, but it found a few more rates falling below the 25th percentile, including preschool rates in all regions and after-school rates in three regions. Page 3 Massachusetts Market Price Survey

4. Market Prices & Affordability How Massachusetts Compares to Other States • Prices for early childhood services are higher in Massachusetts than in any other state, with an average cost of $18,773 per year for infants and $13,158 for preschool-aged children (NACCRRA, 2010) • When placed within the context of a family’s budget, the challenge of affordability and the importance of child care assistance is clear for low-income families • Faced with the high price of care, low-income families are more likely to turn to informal types of care and likely to rely on multiple care arrangements (Adams, Tout & Zaslow, 2007; Burnstein & Layzer, 2007). These factors have been shown to have a negative impact on child development • State child care assistance brings center-based care and regulated family child care within the grasp of low-income families (Adams & Rohacek, 2002; Snyder, Bernstein & Koralek, 2004) Page 4 Massachusetts Market Price Survey

5. Scope of the Market Price Survey • Project Goal - Conduct a credible study of market prices in each region of the state and across all program types to assist EEC in evaluating the adequacy of rates for the purpose of demonstrating equal access to child care for low-income families. The study will: • Examine the market prices for the 25th, 30th, 40th, 50th, 60th and 75th percentiles for each type of care with each of EEC’s rate regions • Highlight significant price changes between 2008 and 2010 • Compare market prices to practitioner wages • Consider other questions raised by the Evaluation Subcommittee during the 2008 market price survey – e.g., absentee policies, etc. • Examine possible alternatives to existing rate areas, especially in regions with clusters of prices that are higher than the region as a whole Page 5 Massachusetts Market Price Survey

6. Overview of Methodology Survey of Random Sample of Programs • Sample Design – Relies on a random sample of 4,800 programs, stratified by EEC region and type of care • Outreach Campaign – Letters and e-mails sent from Commissioner to all programs in the sample in English and Spanish with link to on-line survey. Followed up by reminder postcards and up to three phone attempts • Data Collection – Data were collected through an on-line questionnaire, with follow-up phone calls to programs that did not respond on-line • Progress Update – More than 3,800 responses received. While analysis phase has just begun, the overall response rates are estimated at 89% for center-based/out-of-school-time care and 75% for family child care Page 6 Massachusetts Market Price Survey

7. Project Workplan Project Timeline, Milestones & Deliverables Page 7 Massachusetts Market Price Survey

8. Next Steps Planned Analyses & Reporting • The research team will provide EEC with the following analyses and reports: • Initial report with 75th percentile calculations (March 15) • Complete and final Market Price Survey report (April 8) • Analysis of market prices and wages (June 1) • Analysis of regional price variations and price clusters (June 1) • The analyses and reports will also address specific topics raised during a recent meeting with the Planning & Evaluation Committee, including a comparison of EEC rates to those in other states, analysis of available data in the Professional Qualifications Registry, and a review of cost-based reimbursements/incentives used in other states Page 8 Massachusetts Market Price Survey

9. Sources • Adams, G., Tout, K., Zaslow, M. (2007). “Early Care and Education for Children in Low-Income Families: Patterns of Use, Quality and Potential Policy Implications.” Paper prepared for the Urban Institute and Child Trends Roundtable on Children in Low-Income Families, Washington, D.C. • Adams, G. & Rohacek, M. (2002). More than a Work Support? Issues Around Integrating Child Development Goals Into the Child Care Subsidy System. Early Childhood Research Quarterly, 17, 418-440. • Burstein, N. & Layzer, J.I. (2007). National Study of Child Care for Low-Income Families: Patterns of Child Care Use Among Low-Income Families. Cambridge, MA: Abt Associates, Inc. • Schulman, K. & Blank, H. (2010). National Women’s Law Center. State Child Care Assistance Policies 2010: New Federal Funds Help States Weather The Storm. • Snyder, K., Bernstein, S., & Koralek, R. (2004). Parents’ Perspectives on Child Care Subsidies and Moving from Welfare to Work. Washington, DC: Urban Institute. • National Association of Child Care Resource and Referral Agencies. (2010). Parents and the High Cost of Care. Page 9 Massachusetts Market Price Survey