Impact of Higher Reimbursement Rates on Family Child Care Quality and Workforce Stability

• In Event: Supporting the ECE Workforce: Findings from Four System-Level Professional Development Initiatives

Abstract

Introduction
This study evaluates the effectiveness of a Family Child Care Home (FCCH) Compensation and Quality Pilot Program implemented in a southeastern U.S. state. The initiative aims to address a decline in the number of FCCH providers serving families who receive child care subsidies by increasing provider reimbursement (McLean et al., 2024). The primary objectives are to assess whether this financial intervention enhances provider compensation and benefits, improves program quality, and supports provider retention. Findings will inform state-level policy and funding strategies to sustain a diverse and equitable early care and education (ECE) system.The study is informed by the Unifying Framework for the Early Childhood Education Profession (2020), which includes a focus on structural investments in compensation and professional development as essential for improving service quality and workforce stability. This study also highlights the unique role of FCCHs in serving marginalized populations, including rural families, nontraditional-hour workers, and non-English-speaking households (Anderson et al., 2019).

Methods
A mixed-methods approach is employed. All eligible FCCH providers across the state were invited to apply to participate in the pilot. From the pool of applicants, 72 providers were randomly selected. Quantitative data were collected through a pre-pilot survey and will be followed by a post-pilot survey to measure changes in compensation, benefits, and quality indicators for both participants and non-participants. Qualitative data will be gathered through two focus groups with at least 20 providers and interviews with a minimum of five key ECE system partners. These methods will capture both measurable outcomes and contextual insights into provider experiences and systemic challenges.
Primary data sources include pre- and post-pilot surveys completed by FCCH providers, transcripts from focus groups and interviews, administrative data from the state agency on subsidy payments, provider enrollment, and quality ratings, and documentation from Community of Practice (CoP) sessions. Secondary sources include findings from a 2023 pilot.

Results
Results from the earlier FCCH Subsidy Pilot showed that 44% of programs increased staff salaries and/or benefits, 11% hired additional staff, and 41% streamlined business practices. The current study builds on these findings with a revised compensation formula—shifting from a per-child calculation tiered by quality rating to a flat supplemental payment. Anticipated outcomes include improved provider retention, increased quality ratings, and higher compensation. These expectations align with broader research showing that increased investment in FCCHs can lead to measurable improvements in quality and workforce stability (Bassok et al., 2021; Hooper et al., 2023).

Discussion
This study contributes to the growing literature on sustainable ECE financing and workforce development, particularly within the under-researched FCCH sector. By rigorously evaluating a state-level compensation intervention, it offers actionable insights for policymakers and researchers. The findings have national relevance, offering a replicable model for states aiming to preserve family-based care as a vital component of a mixed delivery system.
 

Authors

• Sandra L. Soliday Hong, University of North Carolina - Chapel Hill

• Lindsay Gomes, University of North Carolina - Chapel Hill

• Kylie L. Garber, University of North Carolina - Chapel Hill