Undersupply or Lack of Demand? Evaluating Measures of Child Care Access

• In Event: Understanding ECE Access: New Evidence on the Dynamics of U.S. Child Care Supply and Demand

Abstract

The most widely used measure of child care access is "child care deserts," defined as areas with three or more young children per licensed slot. However, a high child-to-slot ratio may reflect low demand for formal care rather than a shortage. In the canonical model, equilibrium quantities perfectly reflect local demand and costs, implying that the ease of finding care should not vary systematically.

In this paper, I use provider vacancy rates as a proxy for families' ability to access care and test whether these vacancy rates are correlated with child care desert status. Vacancy rates provide a direct signal of excess demand (at market prices) but are resource-intensive to collect and update. As a more scalable alternative measure of access to care, I construct a measure of the gap between predicted supply and observed supply. Predicted supply is constructed using a set of community characteristics (e.g., religiosity, education levels). I test whether this measure better predicts vacancy rates than the child care desert metric. Vacancy rate data is from the restricted National Survey of Early Care and Education 2019 with county identifiers, and the data on supply of licensed child care slots, which is used to define desert status at the county level, is scraped from the Center for American Progress's 2018 child care desert map. I use demographic characteristics from the American Community Survey 5-year estimates to create expected supply for each county.

I find that desert status is only weakly predictive of center-based vacancy rates, while the demographic-adjusted measure is strongly predictive of infant and toddler vacancy rates. For example, centers located in counties designated as having low supply under the demographic-adjusted measures are 26 percentage points less likely to have an opening in their infant room compared to providers in other parts of the country. This difference is a statistically insignificant 6 percentage points when comparing counties designated as child care deserts to the rest of the country. These findings suggest that care is in fact systematically more challenging to find in some areas, providing suggestive evidence of market frictions and a potential role for policy. However, identifying such areas requires adjusting low supply thresholds for local demand. Refining how we measure access to care is key for policymakers and nonprofit leaders seeking to expand access where it’s most needed.

Author

• Jessica H. Brown, University of South Carolina
  Presenting Author