Poster #122 - Unequal Burdens: Administrative Challenges for Home-Based Child Care Providers in Michigan

• In Event: Friday Poster Reception

Abstract

Introduction: Between 2021 and 2023, Michigan implemented substantial changes to the child care subsidy program, the Child Development and Care (CDC) Scholarship program. Some policy changes were temporary (e.g., increased payment rates) while others were permanent (e.g., billing based on enrollment rather than attendance). This study examines the administrative burden of these policy changes among child care providers, which may manifest as learning, compliance, or psychological costs. We also examined how burdens may vary by provider type (in particular, by comparing licensed home-based vs. center-based providers). 

Methods: This study utilized primary data from providers gathered via a provider survey (400 respondents, 36% home-based) as well as a longitudinal provider panel (i.e., the same 11 providers, 6 of whom were home-based, met multiple times in a focus-group format). Additionally, secondary data (i.e., biweekly CDC scholarship payment records) were analyzed to evaluate participation over time for the entire population of children and providers in Michigan between January 2021-December 2023. 

Results: Home-based providers reported significantly greater learning costs and compliance costs compared to center-based providers. While new billing and payment policies reduced some burdens by making payments more predictable, they also introduced new challenges related to documentation and policy interpretation. For example, provider panelists expressed difficulty navigating rules around extended child absences or holidays and were frustrated by inconsistent or delayed communication from state agencies. The provider survey revealed that less than half of providers (43%) believed state agencies are responsive when their assistance is needed, and many providers (68%) said that they are unsure of who to contact for help when they have a problem. Administrative data shows that although program participation is at an all-time high, the growth disproportionately benefited centers. Between January 2021 and December 2023, the number of licensed centers increased 63%, compared to only 31% for home-based providers. During this same period, the number of children in center-based slots more than doubled (10,148 to 20,685), while the number of children in home-based slots saw a lower relative increase (63%; 4,906 to 8,015). 

Conclusions and Implications: Michigan’s policy changes, while broadly increasing program participation, have had uneven effects on providers, suggesting unequal burdens. Home-based providers are mainly sole proprietorships, where nearly all duties fall to the lead teacher/caregiver, whereas centers have additional staff to share the workload and shoulder the costs of administrative burden. This suggests providers with fewer resources (including time, staffing, and updated technology) may be more vulnerable to administrative burden, potentially deterring their continued participation in the CDC Scholarship program. In order to preserve provider diversity and promote equitable access to care, targeted supports for home-based providers are essential. Reducing administrative burden through clearer communication, responsive assistance, and streamlined processes could improve program satisfaction for these critical providers. 

Authors

• Rebecca Frausel, Public Policy Associates
  Presenting Author

• Colleen E. Graber, Public Policy Associates
  Non-Presenting Co-Author

• Dirk F Zuschlag, Michigan State University
  Non-Presenting Co-Author