Massachusetts Child Care Market Price Survey Board of Early Education & Care April 12, 2011

1. Massachusetts Child Care Market Price Survey Board of Early Education & Care April 12, 2011 Kenley Branscome Kate Giapponi & Emma Cohen Applied Policy Analytics Public Consulting Group, Inc.

2. Overview of Discussion • Survey Purpose and Context • Survey Scope & Methodology • Highlights of Survey Findings • Results of Market Price Survey • Next Steps and Supporting Analyses Page 2 Massachusetts Market Price Survey

3. Survey Purpose & Context Federal Requirements & How Other States Compare • U.S. Office of Child Care requires states to conduct a market price survey every two years as part of Child Care & Development Fund (CCDF) requirements and encourages setting child care reimbursement rates at or above the 75th percentile of prices in the private market. Seen as benchmark rather than requirement • The prices for child care in Massachusetts are the highest in the nation, as reported by NACCRRA in 2010. Comparing prices across states, however, is complicated by a lack of standardized methods and definitions used to collect state price data • Both the 2006 and 2008 surveys found that the state did not meet the 75th percentile benchmark in any region for any type of care. Nationally, only six states met that benchmark in 2010. Down from nine states in 2009. (Schulman & Blank, 2010) • Comparing states that have met the benchmark with those that have not is a challenge, as each state balances priorities for quality, access and affordability in different ways – e.g., some states serve a larger share of children in unregulated settings, have lower income eligibility limits, and/or charge higher parent co-pays Page 3 Massachusetts Market Price Survey

4. Survey Scope & Methodology Survey Scope & Project Goals • Project Goal - Conduct a credible study of market prices in each region of the state and across all program types to assist EEC in evaluating the adequacy of rates for the purpose of demonstrating equal access to child care for low-income families. The survey and companion analyses: • Examines the market prices for the 25th, 30th, 40th, 50th, 60th and 75th percentiles for each type of care with each of EEC’s rate regions • Highlights significant price changes between 2008 and 2010 • Compares market prices to practitioner wages • Considers other questions raised by the Evaluation Subcommittee during the 2008 market price survey – e.g., absentee policies, etc. • Examines possible alternatives to existing rate areas, especially in regions with clusters of prices that are higher than the region as a whole Page 4 Massachusetts Market Price Survey

5. Survey Scope & Methodology Overview of Survey Design • Relied on a random sample of 4,800 programs, including approximately 2,000 licensed child care centers and out-of-school-time programs and 2,800 family child care providers, stratified by EEC region and type of care. The survey excluded programs that were: Free to income-eligible families Part-time only Not currently providing care Licensed-exempt • Conducted outreach campaign with letters and e-mails sent from Commissioner to all programs in the sample in English and Spanish with link to on-line survey. Followed up by postcards and up to three phone attempts. Provided a nominal incentive for participation • The response rate was high, with responses from 90% of center-based and out-of-school-time programs and 78% of family child care providers Page 5 Massachusetts Market Price Survey

6. Results of Market Price Survey Overview of Findings • Prices for center-based care are highest in Boston, Metro and Northeastern regions. Lowest in the Western, Central and Southeastern regions. Prices for family child care are highest in the Metro region and lowest in the Boston and Western regions • Current EEC rates are below the 75th percentile in all regions. Rates are below the 50th percentile in all regions, except for after-school care in the Western Region. While out-of-school-time rates are generally above the 25th percentile in most cases, center-based and family child care rates remain below the 25th percentile in all cases except for center-based infant care in the Western region and family child care for infants/toddlers in the Western, Northeastern and Boston regions • Prices decrease significantly in center-based settings as the age of the child increases, while prices in family child care settings decrease less as the age of child increases • Median prices have increased at a slower pace during the last two years, as compared to the price increases reported in last market price survey Page 6 Massachusetts Market Price Survey

7. Results of Market Price Survey Center-Based 75th Price Percentiles & EEC Rates Page 7 Massachusetts Market Price Survey

8. Results of Market Price Survey Center-Based 50th Price Percentiles & EEC Rates Page 8 Massachusetts Market Price Survey

9. Results of Market Price Survey Family Child Care 75th Price Percentiles & EEC Rates Page 9 Massachusetts Market Price Survey

10. Results of Market Price Survey Family Child Care 50th Price Percentiles & EEC Rates Page 10 Massachusetts Market Price Survey

11. Results of Market Price Survey Out-of-School-Time 75th Price Percentiles & EEC Rates Page 11 Massachusetts Market Price Survey

12. Results of Market Price Survey Out-of-School-Time 50th Price Percentiles & EEC Rates Page 12 Massachusetts Market Price Survey

13. Results of Market Price Survey Price Changes Since 2008 and 2006 • Since 2008, overall median prices increased slightly across all types of care as inflation increased by 4.3%: • Median prices for center-based care increased, on average, by 1% for infant care, 3% percent for toddler care and preschool. Highest increases in Boston and Northeast regions. Lowest in Southeast • Median prices for family child care increased, on average, by 4% for infants/toddlers and 1% for children over two. Highest increases in Boston and Central regions. Lowest in Southeast • Median prices for after-school care increased, on average, by 4%. Largest increase in Metro region and lowest in Boston • Since 2006, the median price of care has increased 10% to 16%, across all types of care compared to an inflation rate of 9.3% Page 13 Massachusetts Market Price Survey

14. Next Steps Additional Analysis Planned • Additional research questions were raised in RFP, during the kick-off meeting and by board committees. In response, the following additional analyses are planned: • Analysis of Local Price Variations – Will analyze the extent to which prices vary among towns within EEC regions. Will rely on zip-code level price data collected in 2008 and update with 2010 price data • Analysis of Practitioner Wage Data – Will analyze the extent to which wages vary across different segments of the early childhood and out-of-school-time workforce. Will be limited to analysis of extant secondary data in the new Professional Qualifications Registry • All work is expected to be complete on or before June 1 Page 14 Massachusetts Market Price Survey

15. Sources • Datta, A.R., Goerge, R., and Yan, T. (2010). Design Phase of the National Study of Child Care Supply and Demand (NSCCSD): Final Report. With additional contributions by Witte, A., Guzman, L., Kreader, L., Weber, R., Schexnayder, D., Zaslow, M., and Wolter, K. Chicago: NORC. • Marrufo, G., O’Brien-Strain, M. and Oliver, H. (2003). Child Care Price Dynamics in California. San Francisco, CA: Public Policy Institute of California. • National Association of Child Care Resource and Referral Agencies. (2010). Parents and the High Cost of Care • Schulman, K. & Blank, H. (2010). National Women’s Law Center. State Child Care Assistance Policies 2010: New Federal Funds Help States Weather The Storm. Page 15 Massachusetts Market Price Survey