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

Session Submission Type: Panel

Abstract

The U.S. childcare sector plays a vital role in the functioning of the economy but is frequently described as a “market failure.” Parents report waiting months for an opening and/or forgoing employment due to the lack of available, affordable care. Complex factors constrain childcare providers’ responsiveness to demand, including regulatory requirements, fixed costs, staffing challenges, and the increased availability of targeted no- or low-cost programs. Meanwhile, the lack of comprehensive, large-scale data on childcare has limited our ability to study how these markets function. 

The current panel aims to improve our understanding of childcare markets by examining how childcare supply, demand, and policy interact using statewide and national data. 

The first paper explores metrics for identifying areas with insufficient childcare supply. The most widely used measure (“childcare deserts”) is based on the number of children per licensed slot. While advantageous for its ease of calculation, it does not account for variation in families’ care needs. Using a nationally representative dataset, the author compares childcare deserts to two alternatives that may better capture demand: (1) childcare vacancy rates and (2) deviations between observed and predicted supply based on community characteristics correlated with demand. 

The second paper illustrates how vacancies and waitlists are not just a result of misalignment between supply and demand. Using national data, the authors find more than three-quarters of centers maintained a waitlist, with little variation across community and provider characteristics. They propose a model where waitlists emerge from providers maximizing profits. Given relatively fixed costs and uncertain demand, setting prices such that expected demand exceeds capacity maximizes revenue by reducing vacancies. 

The next paper provides additional insights into the reasons for vacancies and waitlists. Using 2024 survey data from 1,200 Virginia childcare centers, the authors find that most centers had waitlists (57%) but even more had vacancies (73%), with one-fifth reporting both a waitlist and vacancies for the same age group. Lack of qualified staff was the most common reason centers had a waitlist, and somewhat surprisingly, one-fourth also cited staffing problems as a primary reason for vacancies. Planned analyses will examine whether reasons vary by provider and community characteristics.

The last paper looks at how policies aiming to improve access may unintentionally reduce supply. The authors explore the effects California’s universal prekindergarten expansion from 2010-2023 on the overall availability of center-based care for children too young for the program. Preliminary findings suggest expansion was associated with significant decreases in childcare enrollment for children 0-3 years, with more pronounced declines among infants, a particularly expensive group to care for due to licensing requirements (e.g., the highest staff-child ratios). This distinction means such policies may exacerbate child care shortages, particularly among groups where care is already scarce and costly.

As public investment in childcare remains limited, it is important that policymakers craft targeted solutions to address access. The research shared in this panel stands to inform such policies by improving our understanding of how childcare markets function. 

Policy Area

• Family and Child Policy

Chair

• Hannah Decker

Discussant

• Chris M. Herbst, Arizona State University

Organizer

• Katherine L Miller-Bains, University of Virginia

Individual Presentations

• What Do Child Care Deserts Really Measure? Exploring Demand-Sensitive Alternatives - Presenting Author: Jessica H. Brown, University of South Carolina

• Can You Mind My Kids?: Vacancy Rates and Waitlists in the Child Care Market - Presenting Author: Danna Kang Thomas, University of South Carolina

• Understanding Waitlists, Openings, and Child Care Access: Evidence from Virginia - Presenting Author: Katherine L Miller-Bains, University of Virginia; Non-Presenting Co-Author: Daphna Bassok, University of Virginia

• Effects of California Pre-k Expansion on Local Childcare Markets - Presenting Author: Juan Camilo Cristancho, University of California Irvine; Non-Presenting Co-Author: Nicholas James Ainsworth, University of California, Irvine; Non-Presenting Co-Author: Jade Vanessa Marcus Jenkins, University of California, Irvine