Early Childhood

What Drives the Cost of Early-Childhood Programs? Here’s a Tool to Find Out

By Marva Hinton — March 02, 2018 2 min read
  • Save to favorites
  • Print

It’s the great paradox of early-childhood education. Why do child-care and preschool programs cost so much when providers are paid so little?

“It doesn’t make any sense to [parents],” said Simon Workman, the associate director of early-childhood policy at the Center for American Progress. “For some people there’s a feeling of, ‘Is that money going to profits?’ and for others it’s just complete confusion about where that money goes.”

To help sort this all out, the advocacy group has released a new online, interactive tool and a corresponding report by Workman entitled, “Where Does Your Child Care Dollar Go? Understanding the True Cost of Quality Early Childhood Education.”

The tool provides an estimate of the cost of child care in each state and breaks down how the primary expenses fit into that cost.

For example, the tool shows that it would cost $1,134 a month to enroll a toddler in a base-quality child-care program in Maryland.

Users can also control variables such as classroom size and teacher pay to see how that affects the cost. So, if the class size is reduced and the teacher pay is raised to equal the average salary of a kindergarten teacher, the price jumps to $1,515 a month.

The tool also allows users to find information on the cost of providing care to infants and preschool children.

But no matter what the child’s age the majority of the costs associated with child care go to teacher salaries and benefits. The report finds that these workforce expenses take between 60 and 80 percent of the total expenses to run a program. The rest of the money goes to things such as rent, office equipment, classroom supplies, and food.

The report also stresses that high-quality programs come with a higher price tag, which includes the costs associated with higher salaries and exceeding state licensing standards. It lists the cost of a base-quality and high-quality program for infants, toddlers and preschoolers in every state. In California, a base-quality infant program would cost $17,900 a year, while a high-quality program would run $31,100.

Issues of Funding

The report notes that private tuition covers about 60 percent of the cost to run these programs, while government funding covers 39 percent, and 1 percent is covered by philanthropy.

It suggests that parents can’t afford to pay more, and points out a gap between what parents are paying and the true cost of care that meets minimum standards. That gap widens when care is considered high-quality. The report adds that, “in most cases, families are only able to afford child care because teacher pay is so low, meaning that the current-child care industry relies on child-care workers being poorly compensated.”

So what’s the solution?

“The current child-care subsidy system is not funded well enough to cover the cost of high-quality, and therefore we really need another public investment, a significant public investment,” said Workman, who describes early-childhood education programs as a public good that benefits parents and children.

He says he hopes parents will use the interactive tool to discover the true cost of early-childhood education that pays teachers well and provides them with benefits.

“When they see the costs and realize that’s out of reach for them, we hope that they use that to become an advocate for increased public investment in child care realizing that the benefits will go directly to kids and directly to the workforce and not just go into some black box of profit for child-care providers.”

Photo: A parent walks two preschool-age children to school. (Getty)

Related Tags:

A version of this news article first appeared in the Early Years blog.