How Stable is California’s Child Care Supply?

• In Event: California’s Child Care Supply: Enrollment Capacity, Facilities Constraints, and Labor Constraints

Abstract

Access to high quality child care and early education is important for both parents’ employment and their children’s educational trajectories. A sufficient supply of high-quality affordable care and education makes that access possible. In this descriptive paper, we examine trends in provider capacity and turnover in California from 2015 to 2024, a time with periods of economic uncertainty and a changing ECE policy environment.

To evaluate changes in the total supply of child care over time, we look at all regulated[1] child care providers in the state that serve children ages 0 to 4. This consists of licensed child care centers, licensed family child care homes, and transitional kindergarten (TK) locations. We use licensed capacity as a proxy for supply in centers and family homes, as this represents the maximum number of children that can be cared for as of the time the license was issued. We evaluate provider churn by analyzing the rates at which providers open their first license, become inactive, or permanently close[2] for licensed providers at centers, large and small family child care homes.  We supplement these analyses with results from a 2024 survey of over 100 subsidized child care navigators and from 10 focus group with families and providers conducted in the summer of 2024.

A majority of navigators say that provider supply has decreased in recent years. However, findings from an analysis of provider turnover indicate fewer licensed providers opened their doors during the pandemic, but permanent closures did not spike. In addition, licensing data indicate that, while center-based capacity has on net decreased somewhat, licensed family home capacity increased by about the same amount resulting in a fairly stable supply of licensed care in recent years. Additionally, the total child population age 0-4 has been declining for almost a decade, leading to an increase in the share of children for whom licensed child care spaces may be available to just over half statewide. We find that the overall supply of regulated child care spaces is increasing due to TK expansion despite some degree of uncertainty about this option on the part of parents and child care providers.  

[1] License-exempt care represents an important part of the child care supply, but administrative data is unavailable for the total number of children being served by license-exempt providers.

[2] We define the provider closure rate as the number of permanent provider closures in a year divided by the total number of active providers open at the start of that year and the opening rate as the number of newly licensed providers in a year divided by the total number of active providers open at the start of that year

Authors

• Brett Guinan, Public Policy Institute of California
  Presenting Author

• Patricia Malagon, Public Policy Institute of California
  Non-Presenting Co-Author

• Caroline Danielson, Public Policy Institute of California
  Non-Presenting Co-Author