Child day care services: an industry at a crossroads - includes related article on employed mothers

Monthly Labor Review, Dec, 1990 by Darrel Patrick Wash, Liesel E. Brand, Phyllis Moen

Although employment growth in this industry is projected to be among the fastest in the economy over the 1988-2000 period, the rate of growth should slow as demographic pressures ease

The continued entry of mothers of preschool and school-age children into the labor force is directing new attention to the subject of child care. In addition to concerns about the availability, cost, and quality of child care, questions also have been raised about the role of government in the provision of such care and about the advisability of having someone other than a parent raise the Nation's children. Moreover, expectations of future tight labor markets, skill shortages, and lagging international economic competitiveness have provoked a dialogue on the relationship between the availability of suitable child care and a parent's productivity in the workplace.

The focus of these concerns is an industry primarily providing care for infants, prekindergarten or preschool children, or older children when they are not in school.(1) Generally, today's child care arrangements fall within one of two categories: Family day care--care that is provided informally in the parent's or caregiver's home--and formalized day care centers. The latter include for-profit facilities and not-for-profit facilities run by State and Federal Government agencies, religious institutions, or community organizations.

This article discusses the structure of the child care services industry, its historical and projected employment trends, and factors underlying the growth of the industry, including employment shifts among different types of care providers. It also discusses the degree of government involvement and identifies some of the reasons why the future direction of this industry is so difficult to predict.

Structure of the industry

Child care needs vary widely, depending on the specific circumstances of each family. In many families, both parents are employed, either full or part time. In others, single parents must juggle the responsibilities of work and family essentially alone. Still other families must deal with shiftwork or unusual work hours. Parents with infants and preschool children must arrange for care during the entire time they are away from home. By contrast, older children, who spend much of the day in school, may only need care before and after school while their parents are at work.

Requirements for child care are met in many ways. The following tabulation, based on data collected by the Bureau of the Cencus in the winter of 1986-87, shows how day care outside of school hours was provided for children under 15 years of age whose parents were working:(2)

                                      Percent
                                     of children
Total                                  100.0
  Family day care                       47.0
    Care by relative                    31.7
    Care by unrelated person            15.3
  Day care center                       11.5
  Parent cares for child while working   6.1
  Child cares for self                  35.4

Family day care was the most prevalent arrangement. In its most common form, a grandparent or other relative cared for the child while the parents were working. This type of care is popular for several reasons. Parents apparently are more comfortable leaving their children with relatives than with strangers. In addition, it is relatively easy to arrange, eliminating the need for a lengthy search for a suitable caregiver. For many parents, this kind of arrangement is a financial necessity; many people care for the children of close relatives as a favor, making no charge or charging less than market rates.

The other type of family day care arrangement was care provided by an unrelated person, generally in the caregiver's home. This frequently is a mother caring for her own children who takes in one or two other children from the neighborhood.

Center-based care served about 1 of every 8 children under the age of 15 with a mother in the labor force. About 60 percent of all day care centers are operated for a profit, as independent businesses or as part of a local or national chain. Nonprofit day care organizations account for the remaining 40 percent.(3) Sponsors of the latter include churches, YMCA's, colleges, employers, public schools, social service agencies, and governments.

The census data indicate that, in 1986-87, 4 in every 10 children received no formal care while their parents were at work. The majority of these children, commonly called "latchkey kids," were totally unsupervised before or after school. The remainder were cared for by a working parent, either at home or at the job.

Government involvement

Support. Federal, State, and local governments are actively involved in expanding the availability of child care. Government-operated early childhood programs are the most visible manifestations of this involvement. The best known of these programs is Head Start, a Federal day care program established to provide disadvantaged children with social, educational, and nutritional services. It operates in every State, and serves an estimated 450,000 children, approximately 1 in 5 of all those eligible. Eligibility is determined by a family's income and Federal poverty guidelines. The program enjoys strong political support and is viewed as one of the most successful of all educational or antipoverty programs.