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III
The Current System
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6
Child Care Services
Although many working parents continue to care for their children
themselves or to rely on relatives, nannies, and babysitters to provide care
at home, many others have turned to caregivers in settings outside the
home. These include day care centers, operated on a for-profit or a not-for
profit basis; family day care homes and group homes; public and private
nursery schools, prekindergartens, and kindergartens, operated as part-day
or full-day school programs; before- and after-school programs; and Head
Start programs.
There have been striking changes among these care arrangements in
the past three decades; see Figure 6-1. Although data on the supply of child
care services are largely inadequate because of the broad range of providers
and auspices and the lack of systematic collection of information at the
national or state level, there is evidence that the supply of out-of-home
services has increased substantially since the 1970s (Kahn and Kamerman,
1987~.
The most striking characteristic of the existing system of out-of-home
child care is its diversity. Like other social services, child care services
have not developed within any designed framework of regulations, policy,
or legislation. States vary in their commitment to developing, funding, and
regulating care, and this variation increases at the community level. The
resulting "patchwork quilt" is an amalgam of individual and institutional
child care providers (Siegel and Lawrence, 1984~; the individual programs
do not perceive themselves as interrelated or as sharing a common set of
goals.
The need for some coordination and regulation of child care services
has been widely recognized for some time, and the debate over which
jurisdiction should regulate, what should be regulated, to what extent, with
147
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148
30 ~ 1958
Eli 1965
25 ~ =1 1977
Em 1982
20
Lo
15
Lo
to
10
5
o
WHO CARES FOR AMERICA'S CHILDREN?
~ 1984-1 985
_.
_~_
~\ ~Axon ~ <~\~0~ GO to
CARE ARRANGEMENT
FIGURE 6-1 Child care arrangements for children, under age 5 of full-time employed
mothers, 1958-1985. Source: Data from Bureau of the Census (1987~; Lueck et al. (19823;
O'Connell and Rogers (1983~.
what exceptions, and with what types of enforcement and sanctions is an
old one. After more than a decade of legislative and regulatory battles at
the national level, the Federal Interagency Day Care Requirements were
eliminated in 1982, and states are now responsible for the regulation of child
care services. Since the early 1980s, the debate at the state and local levels
has focused on ways to improve consumer knowledge and standards for
protection as well as government monitoring and enforcement. In general,
regulations have gradually become more stringent during the past decade
and a half, although states vary dramatically in their specific provisions (see
Appendix A). Moreover, within this context, different types of programs
are governed by different regulatory authorities, and some providers are
exempt because of the auspices under which they operate or the number
of children they serve.
In this chapter we review what is known about the delivery and reg-
ulation of child care services and some barriers to effective services. In
Chapter 4 we discussed the role of regulation as it affects the quality of
care that is provided by different types of programs and arrangements; in
this chapter we consider the ways in which regulation and the regulatory
environment affect the delivery of child care services. It is important to
note at the outset, however, that our knowledge is limited. Information
concerning the supply of child care services is not systematically reported,
and few programs have been rigorously evaluated. As a result, information
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CHILD CARE SERVICES
149
about program effects must be cumulated from the growing body of small-
scale child care studies that provide some insights into how various delivery
approaches work, for whom, under what circumstances, at what costs, and
with what intended and unintended consequences, but that generally lack
comparability in their design and methods.
CHILD CARE SERVICES
Care by Relatives
Many parents provide care for their own children by working split
shifts or other flexible arrangements. A total of 3.7 million children under
age 15 whose mothers are in the labor force are cared for exclusively by
their parents (Bureau of the Census, 1987~. Grandparents, siblings, and
other extended family members continue to be important sources of care,
especially for infants and toddlers, and to supplement school and school-
based programs: approximately 3.1 million children under age 15 are cared
for by relatives in their own homes or in the relative's home (Bureau of the
Census, 1987~. Together, these 4.8 million children constitute more than 20
percent of all children under age 15 who receive supplemental care. But
relative care is declining for all children because many grandmothers and
aunts who once were available to serve as caregivers are now employed
(Bruno, 1987~. As discussed in Chapter 2, parents who work evening or
night shifts and those who work part time appear to be more likely to
rely on relatives to care for their children than those who work regular day
shifts, especially if they work full time. In two-parent families, the caregiver
is often the father. The direction of the relationship between shift work
and the use of relative care is not known, however: it is unclear if families
who choose to rely on relatives (including fathers) as caregivers choose to
work evening and night shifts or, if having chosen or having been assigned
to irregular shifts, they must rely on relatives in the absence of other types
of care (Presser, 1986~.
Child care provided by parents and other relatives is unregulated
whether it occurs in the child's own home or in the relative's home. Only
when an adult cares for a related child along with other children in a
child care center or a regulated family day care home are these services
subject to state or local government monitoring and enforcement. Data
concerning the incidence of relative care come from the Current Population
Surveys (CPS), the Survey of Income and Program Participation (SIPP),
the National Survey of Family Growth (NSFG), and the youth cohort of the
National Longitudinal Survey. These sources provide information concern-
ing trends in reliance on relative care, but they do not provide information
about the relatives who serve as caregivers, for example, whether they
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150
WHO CARES FOR AMERICA'S CHILDREN?
provide care for other children, including their own, in addition to the
relative child. Nor is there any information about their qualifications or
the amount, if anything, they are paid for their services. There is also no
reliable information on their longevity as caregivers.
Nannies and In-Home Babysitters
There is similarly little systematic information on nannies, babysit-
ters, and other unrelated caregivers who care for children in the child's
own homes. Data from the NSFG suggest that approximately 1 million
children were cared for in this way in 1982; 1985 SIPP data showed that
approximately 687,000 (2.6 percent) of children under age 15 who received
supplemental care were cared for in their own homes by an unrelated adult.
If these data are comparable, there has been a decline of approximately 31
percent in the use of in-home care in just 3 years. Because so little is known
about this form of care, it is difficult to speculate about reasons for the
decline. It may reflect in part the growth in out-of-home care alternatives.
In addition, as Hofferth and Phillips (1987) point out, recent migrants have
often served in this role. As immigration patterns and laws have changed,
and as women who have been in this country for some time accumulate
labor market experience, their likelihood of becoming child care providers
in someone else's home will probably continue to decline. Like relative
care, in-home care provided by nannies, babysitters, and other unrelated
caregivers is unregulated.
Nanny placement agencies, which have sprung up in recent years in
many large metropolitan cities across the country, provide some anecdotal
information on women who serve as in-home caregivers. Many are young,
in their late teens and early 20s, from small communities in the Midwest
and far West who want to have the experience of living and working
in a large city. Some are black women living in urban centers. Others
are immigrant women from Central America, the Pacific Islands, and the
Caribbean, newly arrived in this country and often illegal aliens. A few
are Europeans on short-term visas who have come as a part of an au pair
or living-abroad program. Some have professional training and experience;
many do not. Some live on their own; many live in the homes of their
employers. Many in-home caregivers combine child care responsibilities
with some housekeeping duties. Although salaries vary dramatically, recent
information from Washington, D.C., suggests that the range is $150 to
$350 per week, depending on hours of work, specific duties, and benefits
(Granat, 1988~.
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CHILD CARE SERVICES
151
Family Day Care
Although there are no reliable data on the number of family day
care homes or the number of children in those homes, this form of care
clearly represents a significant portion of the supply of child care ser-
vices in the United States in the late 1980s. Since many family day care
providers operate in the underground economy, however, precise estimates
of their numbers and the number of children they serve are illusive. In the
1977-1978 Family Day Care Home Study, the U.S. Department of Health
and Human Services estimated that 1.8 million unregulated providers and
115,000 licensed or regulated providers were caring for 5 million children
and that approximately 23 percent of these children were of school age
(Fosburg, 1981~. Adams (1982) reported that a 1982 telephone survey of
all states and territories found 137,865 licensed, registered, or certified
family day care homes. A 1988 survey of the states and Washington, D.C.,
undertaken as a part this panel's study, showed 198,257 licensed family day
care homes nationwide (see Figure 6-2~. Estimates of unregulated care
cited in congressional testimony and elsewhere range from 60 to 90 percent
of the total supply, suggesting that there may now be between 496,000 and
1,983,000 such homes in the United States.
Estimates of the number of children cared for in family day care homes
are similarly wide. The Family Day Care Home Study reported an average
of 3.5 children per home (excluding the caregiver's own children), with a
range of 2 to 6 children per home (Fosburg, 1981~. Average enrollments
varied according to the regulatory status of the home: sponsored homes
(those in a network, which may or may not be regulated) averaged 4.3
children; regulated homes averaged 4.0 children, and unregulated homes
averaged 2.8 children. Using the average of 3.7 children per home suggests
that there may be as few as 1.8 million or as many as 7.3 million children,
including school-age children, in family day care. Using an average of 3.5
children per house, Kahn and Kamerman (1987) point out that the total
5.0 million estimate that is widely quoted could be correct. However, Kahn
and Kamerman (1987), using NSFG data, estimate 5.1 million children in
family day care.
An increasing number of states treat large family day care homes or
group homes as a separate category for regulatory purposes. Epically these
providers serve between 7 and 12 children (although some include larger
groups). The number of large family day care or group homes appears to
be expanding rapidly, from 2,371 in 1985 to 5,373 in 1988, according to
survey data collected by the panel.
Data from the CPS and the NSFG show that the highest rate of use
of family day care is for very young children (HoRerth and Phillips, 1987~.
In 1982, approximately 10 percent of children in family day care homes
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152
WHO CARES FOR AMERICA'S CHILDREN?
250
200
cn
Is
~ 1 50
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._
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~ 100
m
he
50
o
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1977- 1 982
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1 988
YEAR
FIGURE 6-2 Regulated family day care homes, 1777-1978, 1982, 1988. Source: Data
from Adams (1982~; Fosburg (1981~; unpublished panel survey.
were infants, 26 percent were toddlers, 27 percent were preschoolers, and
about 36 percent were of school age (unpublished tabulations from the
1982 NSFG). Although these measures are rough, they suggest that the
percentage of toddlers in family day care has declined somewhat since 1977
and the percentage of school-age children receiving care before and after
school hours and on school holidays has increased (Fosburg, 1981; Hofferth
and Phillips, 1987~.
Family day care is not a monolithic service. It differs greatly from
provider to provider and from community to community. In general,
however, family day care providers fall into one of three broad categories
(Fosburg, 1981~. The first is young white mothers in their late 20s and 30s
with their own young children at home. Many of these women left the
paid labor force when they became mothers, and they provide care to other
children as a means of supplementing their family income while at home.
Although their income is still low by general standards, these women have
relatively higher incomes than those in the other groups. Many of them
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CHILD CARE SERVICES
153
resume employment outside their homes when their own children are of
school age or when they no longer require care.
The second group comprises women in their 40s and 50s who care for
at least one related child, often a grandchild. Like the younger women in
the first category, they often decide to take on the care of other unrelated
children as a means of earning some money while they are staying home
with their relative's child. It is not uncommon for them to close down their
family day care services when the related child no longer requires care.
Many black or Hispanic caregivers fall into this group.
The last group includes women in their 30s to 50s who care only for
unrelated children. They may have begun providing child care when they
were caring for their own young children and then developed their services
into a business and a career. These providers are more likely to have had
some professional training in child development and child care, and they
are more likely to be regulated and sponsored than are providers in the first
two groups. They also tend to stay in the family day care market for more
sustained periods of time than the others. Overall, however, three-quarters
of family day care providers describe this as a permanent role (Fosburg,
1981~.
Family day care is distinguished by small group size (typically 6 or fewer
children) and generally mixed-age groups (including school-age youngsters
during before- and after-school hours), although some providers care only
for infants and toddlers or only for preschoolers. Despite variation in the
ages of children in their charge, however, family day care providers are
unlikely to care for children whose race or ethnicity is different than their
own. The National Day Care Home Study found that 80 percent of children
in family day care are the same race and ethnicity as the caregiver (Fosburg,
1981~.
Consumer surveys indicate that among parents who prefer family day
care, it is the intimacy of a small group and a home environment as
well as a sense of shared values with the caregiver that are important
(Leibowitz et al., 1988~. Parents frequently live in close proximity to their
family day care providers and, especially black or Hispanic parents, are
of similar economic backgrounds (Waite et al., 1988~. Several researchers
emphasize the close relationships that often develop between providers and
children and between providers and parents. These adult relationships are
frequently more informal and social than between parents and caregivers
in other settings, and they are thought to enhance communications and
interactions that can positively affect the child.
In 1988, 27 states required some form of licensing for family day care
providers depending on the numbers of children in their care. Twenty-three
states did not have any formal licensing requirements, although 13 required
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WHO CARES FOR AMERICA'S CHILDREN?
Or offered voluntary registration, and 6 states had an approval or a certifi-
cation procedure for providers seeking to receive federal funds (Blank and
WiLkins, 1985; Morgan, 1987; unpublished data from panel survey). Some
states exempted homes serving fewer than four children. Despite the ens-
tence of licensing requirements and registration or certification provisions,
few family day care providers appear to operate under them. Fosburg
(1981) found that in three cities in states with regulations, 94 percent of
providers were operating informally and independently; another 3 percent
were independent and licensed or registered, meeting state regulations (and
federal standards governing the Child Care Food Program); and another
3 percent were regulated and a part of a family day care network, under
the auspices of a sponsoring agency. In a recent study of the Child Care
Food Program, Glantz and colleagues (1988) estimated that approximately
70 percent of family day care providers are unlicensed.
Despite recent efforts in many states to register family day care
providers (as opposed to licensing them) and to bring them into organized
systems, there is consensus that the vast majority are still unregistered and
unregulated (Kahn and Kamerman, 1987~. The reasons are not clearly un-
derstood. Undoubtedly, some providers regard themselves as temporarily
caring for the children of relatives and neighbors while raising their own
children, and they may be unaware of the requirements or may regard the
licensing process as too complex and costly to negotiate. Others may re-
gard licensing as an intrusion, especially if they have no interest in seeking
government subsidies. Still others may be hoping to avoid the tax liabil-
ities or lost welfare benefits and transfers that would result from having
to report their income (Kahn and Kamerman, 1987; Morgan, 1980~. The
primary incentives for becoming licensed or registered appear to be public
subsidies, such as the Child Care Food Program and funds for serving chil-
dren in low-income families, referrals from resource and referral agencies
and public social service agencies, as well as the ability to obtain liability
insurance. Providers who see their activities as a business or a career are
frequently more eager to gain the visibility that licensing and registration
may bring.
Kahn and Kamerman (1987) report that 94 percent of family day care
is carried out through "largely invisible and unprotected" cash transactions;
generally, reliable cost data are lacking. Fosburg (1981) found early in
the 1980s that sponsored and regulated care was more expensive than
unregulated care; see Bible 6-1. In more recent estimates of the costs
of family day care in selected cities, Work/Family Directions, Inc., found
a wide range within and across 15 cities; see Table 6-2. On the whole,
family day care is slightly less expensive than center care, and unregulated
family day care is least expensive of all. Kahn and Kamerman (1987) note
that independent, unregulated providers rely solely on market fees and
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CHILD CARE SERVICES
TABLE 6-1 Average Weekly Fee per Child by Type of
Family Day Care Home and Race of Provider
Race of Type of Care
Provider Sponsored Regulated Unregulated
White $31.80 $23.68 $19.70
Black 24.68 21.61 16.57
Hispanic 24.49 21.42 16.54
Average 6.36 22.65 17.80
Source: Data from Fosburg (1981:96~.
TABLE 6-2 Weekly Child Care Rates for Family Day Care in 15 Cities,
August 1987
Preschool-Age
City Infants Toddlers Children
Atlanta, Ga. $35-150 $45-70 $45-70
Boston, Mass. 150 95-125 80-105
Chicago, Ill. 60-100 65-85 50-80
Cleveland, Ohio 25-100 25-100 25-100
Denver, Colo. 60-100 455-95 55-95
Greenville, S.C. 35-60 35-60 35-60
Los Angeles, Calif. 44-88 44-88 38-84
Miami, Eta. 25-75 25-65 20-65
Minneapolis, Minn. 70-90 60-75 50-65
New Orleans, La. 30~5 30~5 30~5
New York, N.Y. 35-150 35-150 35-150
Oklahoma City, Okla. 35-60 40-80 40-65
Raleigh, N.C. 25-125 25-85 25-85
Seattle, Wash. 46-58 69 69
Washington, D.C. 35-125 35-125 35-100
Source: Unpublished data from Work/Family Directions, Inc.
155
therefore both charge and earn somewhat less than sponsored and regulated
providers. Those that are a part of a network or are agency sponsored are
more likely to have their services partially or completely subsidized by
public funds, including the Child Care Food Program. Indeed, the cost
differences between sponsored or regulated family day care and center care
are generally modest. As a result, these caregivers are more likely to earn
somewhat higher wages (Kahn and Kamerman, 1987~.
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CHILD CARE SERVICES
183
has not been an analogous increase in licensing staff. In addition, licensing
personnel are under great pressure to interpret a myriad of regulations
that may have been drafted to allow flexibility but in fact create confusion.
Individual regulations may use such words as "adequate" or "sufficient"
very differently and, therefore, subject similar programs to very different
standards.
A major question that remains largely unanswered is the effect of
regulations on the supply of child care services. Do stringent regulations
drive some providers out of the market or discourage others from entering?
Do they significantly raise the costs of care, and if so, who bears these
additional costs? Do they affect the quality of care that is provided? There
is no shortage of opinion on these matters, but there is little convincing
evidence. Many observers conclude that the elimination of the Federal
Interagency Day Care Requirements in 1981 led some large commercial
chains to expand their operations in the southern states where there is less
stringent regulation of child care. Low standards, particularly as they apply
to staff qualifications and to staff/child ratios, allow providers to reduce
staff costs and enhance profitability. At the same time, however, relatively
lower real estate costs in the South have meant lower capital expenditures
for providers developing facilities. Hence, it is difficult to determine the
extent to which regulation has actually affected the supply of center care.
Critics of state licensing and registration requirements insist that they
increase the costs of providing services, "driving providers underground
and limiting the number of children who can benefit" (Lehrman and Pace,
1985:1~. This has been a special concern with regard to family day care
homes. Although there are no definitive data that show that providers have
closed or closed and then reopened as unlicensed facilities-data from
state licensing offices indicate that in states with more stringent regulations
and registration requirements, there are relatively fewer licensed family
day care providers and fewer licensed spaces for children (data from panel
survey).
I~enty-seven states require some form of licensing or registration for
family day care providers, depending on the number of children in the
home; 13 states require or offer voluntary registration, again depending
on the number of children in the home; 4 states combine these two
mechanisms; and 6 states have an approval or certification procedure if a
provider receives federal funds (Morgan, 1987; data from panel survey).
As Kahn and Kamerman (1987) indicate, most child care experts agree
that for the most part this licensing or registration does not constitute an
accountability or monitoring system. Some experts worry that this lack
of accountability may be a problem; others believe there is no way to
effectively regulate all family day care.
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WHO CARES FOR AMERICA'S CHILDREN?
The registration and certification systems may provide positive incen-
tives for some family day care providers to come into the regulated system,
by offering referrals, training and technical assistance, and help in obtain-
ing federal subsidies, especially through the Child Care Food Program.
Evidence concerning the growth of family day care networks suggests that
this incentive may be operating in many states, even those with stringent
regulatory policies. And advocates from many points on the political spec-
trum have supported such incentive (rather than punishment) approaches
to promoting the adoption of performance standards in family day care
homes. ~ date, there has been no analysis of the effects of registration
or certification on the quality of child care services or on developmental
outcomes among children in family day care. The National Day Care
Home Study in the late 1970s did show that regulation and sponsorship
were associated with many of the characteristics that are desirable in family
day care settings (Fosburg, 1981~.
Building and Zoning Restrictions
In many communities, restrictions on local land use, building, and
zoning have become barriers to the development of child care programs
and facilities centers as well as family day care homes whether operated
on a for-profit or not-for-profit basis.1 Local ordinances that affect child
care services include zoning and land use laws, building codes, and deed
restrictions. The use of these types of provisions to restrict the location
and operation of child care services has two different origins. In many
communities, concerns about the effects of child care facilities on the
character of neighborhoods, noise levels, property values, traffic, and the
like have led citizens' groups to invoke such provisions as a means of
discouraging or opposing the establishment of centers and family day care
homes. Those provisions have also been invoked by child care activists to try
to ensure the basic health and safety of children in out-of-home care, using
restrictive local building and land use provisions as means of compensation
for lax state licensing and enforcement. In states with lenient regulations
on group size and staff/child ratios, for example, proponents of regulation
have used local zoning and building restrictions to create barriers to the
establishment of programs that are of poor quality in other dimensions.
Although there are no national data available, experience suggests that
local restrictions have in many cases limited the development of licensed
child care services.
11he information in this section comes largely from the Child Care Advocapy Center in San
Francisco (Abby Cohen, personal communication, May 23, 1988~.
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CHILD CARE SERVICES
185
Zoning and land use laws have been used to exclude child care ser-
vices, especially family day care homes, from residential neighborhoods,
where ironically they are by definition intended to operate in many states.
Opposition has been greatest toward large family day care or group homes,
which serve as many as 12 to 15 children. Some communities have invoked
occupation ordinances, which limit the use of space (especially outdoor
space), restrict hiring home employees for child care purposes (other than
to care only for the occupant's children), or prohibit operating any kind
of business in the home. In addition, by establishing impossible condi-
tions (e.g., requiring 10-foot masonry walls around the residential property,
costly use permits, conditional use permit hearings), child care services
are excluded de facto whether or not local ordinances explicitly prohibit
operations.
Building codes have similarly been used to restrict child care services in
commercial spaces and residential areas. Specific requirements concerning
the configuration of indoor and outdoor space, building permits, and the use
of materials have stymied many commercial developers willing to establish
child care centers in new office complexes and proprietary providers building
their own new facilities (Claudia Ostrander, Maryland National Bank,
personal communication, May 23, 1988~. They have also affected family
day care providers who adapt residential spaces for child care. It is not
uncommon for building codes and fire codes to be contradictory, which
creates impossible problems for providers and takes months or even years
to resolve through administrative and judicial processes.
In addition to local public ordinances that limit use and set conditions
concerning the configuration of space, deed restrictions have been adopted
in many developments, condominiums, and cooperative properties. These
private agreements limit the rights of property owners to acquire, own, use,
or dispose of their property, and, increasingly, they are being used in subur-
ban condominium and townhouse developments to exclude family day care
providers. Even if providers become licensed, homeowners' associations
can force them to close down.
One way to overcome such barriers is through state preemption laws.
Approximately 10 states have passed legislation prohibiting local zoning
officials and private homeowners' agreements from excluding family day
care. In most cases, these laws specify that family day care Is a permit-
ted residential use requiring no further approval. Preemption laws have
helped to alleviate, and In some cases overrule, local building and zoning
restrictions, but they also present problems. For example, because there
are no uniform definitions of family day care from state to state and even
from locality to locality, questions often arise as to whether the service in
question is a family day care home or a group home and, therefore, which
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WHO CARES FOR AMERICA'S CHILDREN?
provisions do or do not apply. In addition, in suspending deed restric-
tions, preemption laws may affect the ability of commercial developers and
homeowners' associations to obtain liability insurance for common areas.
Local ordinances vary, and even within the same community they
may be inconsistently applied. The enforcement of building and zoning
restrictions has had a disproportionate impact on providers in low-income
neighborhoods. Public housing frequently restricts its use for business
purposes. Lacking the resources to meet building and fire provisions,
providers may either shut down or operate illegally, thus limiting the
supply of licensed child care in communities where it is needed.
Liability Insurance
In the early 1980s, economic hardship in the insurance industry cou-
pled with wide media attention to several cases of alleged sexual abuse
in child care centers led many insurance companies, fearful of their po-
tential liability, to significantly increase premium rates to providers or to
discontinue coverage for child care operators. A national survey of cen-
ters and licensed family day care homes in 1985 revealed that more than
two-thirds of providers had experienced policy cancellations, nonrenewals,
reductions in coverage, or large rate increases. Rate increases averaged ap-
proximately 300 percent (Strickland and Neugebauer, 1985~. These results
were corroborated by several state-level surveys (Phillips and Zigler, 1987~.
Although there is disagreement about whether claims records justified
these actions, by the mid-1980s child care was regarded as a high-risk
business by insurance actuaries (U.S. House of Representatives, 1985~. In
congressional hearings, insurance industry representatives cited inadequate
regulation and monitoring as a fundamental concern and indicated that
companies that continued to write policies during this period applied their
own "loss" standards (Phillips and Zigler, 1987; U.S. House of Repre-
sentatives, 1985~. These standards varied by company but in most cases
were more stringent than applicable state licensing standards on matters of
stafI/child ratios, employee screening, and staff supervision (Phillips, 1986~.
Over the past few years, as the financial health of the insurance industry
has improved and as publicity about sensational cases of alleged child abuse
has subsided, some companies have resumed writing liability coverage for
child care providers, particularly for centers. Premiums vary on the basis
of a number of factors, including building structure, program size, and
perceived safety factors. Together with the National Association for the
Education of Young Children (NAEYC), for example, Cigna has begun
to offer coverage to centers that meet NAEYC credentialing criteria. In
1988 approximately 3,500 centers nationwide were covered by this policy,
which provides package coverage for the building and its contents, liability,
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CHILD CARE SERVICES
187
worker's compensation, and transportation liability. (Plans are currently
under way to develop a similar program for family day care homes.)
Independent insurance brokers report that in 1986, the first year that the
program was in operation, it was so profitable that Cigna paid a 7.1 percent
dividend back to the insured; in 1987 Cigna paid back a 23.4 percent
dividend (William Ashton, Forest T. Jones & Co., personal communication,
May 23, 1988~.
An important policy issue, however, is the extent to which the high
costs or unavailability of liability insurance may have forced providers to
shut down or to operate without coverage. Unfortunately, there are no
definitive data on this issue. In 1988 24 states required insurance coverage
for child care centers and 7 required coverage for family day care homes
(unpublished data from panel survey). Therefore, it seems likely that if
the liability insurance crisis of the mid-1980s had an impact, it was more
likely to have been felt by child care centers than family day care homes.
There is a widespread perception that many family day care providers
operate with no special coverage other than a regular homeowner's policy
(if that). Strickland and Neugebauer (1985) concluded that very few centers
or family day care homes shut down as a direct result of actions by the
insurance industry. Moreover, the success of programs such as that offered
through NAEYC may help to alleviate the problem of obtaining insurance
for centers and family day care homes that meet set performance standards.
Coordination and Planning
As we have described throughout this chapter, the child care system
in the United States is characterized by diversity by different types of
programs, providers, and institutional auspices that represent different pro-
fessional and economic interests. In the absence of a strong national child
care policy, child care services have grown haphazardly, in response to an
array of perceived needs at the community level, with partial and frag-
mented leadership from the states and the federal government. Child care
providers and advocates speak with many voices and inevitably represent
a range of interests and perspectives that are as likely to be competing as
coordinating.
As a result, planning and coordination are unusual at every level.
Because the federal government reduced its role in the provision, financing,
and regulation of child care during the 1980s, there has been no focal
point, either in Congress or in the executive branch, for child care issues.
Child care and early childhood education are reasonably the concerns of
numerous committees in both houses of Congress, and hearings on pending
legislation have been held over the past 2 years by nearly all of them. Within
the executive branch, no single agency or department has responsibility for
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188
WHO CARES FOR AMERICA'S CHILDREN?
establishing policy, setting priorities, or facilitating coordination on child
care issues.
With a couple of exceptions, the same has been true of the states. A1-
though many have passed legislation for funding early childhood programs
through the schools, licensing and registering centers and family day care
homes, subsidizing care for children from low-income families and those
with special needs, and developing resource and referral services, few have
effectively developed mechanisms for planning and coordination among
these separate initiatives. The two notable exceptions are Massachusetts
and California. In Massachusetts, the Office of Human Resources works
across departments and provides a focal point for the range of state pro-
grams and initiatives. On the basis of a 1983 planning report by the
Department of Social Services and a 1984 report by the Governor's Day
Care Partnership, a statewide advisory group was established, the state-
level administrative capacity was upgraded, and priorities were established
for future policy and program development. Among those priorities were
a significant increase in child care funding through the social service sys-
tem, a commitment to statewide resource and referral coverage, a pilot
grant program to assist school districts in establishing programs for 3- and
4year-olds, a corporate child care program to assist employers, and a
voucher program (Commonwealth of Massachusetts, 1985; Massachusetts
Department of Social Services, 1983; Catherine Dunham, Massachusetts
Governor's Office, personal communication, Nov. 3, 1987~.
In many ways, California served as the model for actions in Mas-
sachusetts. California has the highest state budget for child care services
and the longest history of involvement and leadership on child care. The
Governor's Advisory Committee on Child Development Programs has lob-
bied effectively for funding, advocated specific policies, and kept child care
issues visible in the state. In addition to its strong support for the develop-
ment of school-based programs, resource and referral services, vouchers for
subsidizing care for low-income families, and a self-insurance program (ad-
ministered through the Department of Education), the state has provided
support and incentives for planning and coordination at the local level.
These efforts have effectively involved corporations, and in turn, their re-
sources have been mobilized in a systematic way to join local government
in increasing and improving the child care supply. In the San Francisco
Bay area, Bank of America raised over $2 million from local corporations
and helped establish a "supply development" project for six pilot sites. The
state's well-developed system of resource and referral services has provided
the administrative core for assessing supply and demand at the local level
and for facilitating the coordination of resources at the municipal and
county level. As a result, child care has become a municipal political issue
in many California communities (Kahn and Kamerman, 1987~.
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CHILD CARE SERVICES
189
At the local level, there are other scattered models of efforts to ef-
fectively link public and private resources and to coordinate the activities
of different providers and institutional organizations. In Minneapolis and
St. Paul, Minnesota, two strong and effective organizations were formed
in the mid-1980s to address the child care issue- the Greater Minneapolis
Day Care Association and the Resources for Child Caring. These organi-
zations often collaborate to improve child care services in the twin cities.
Minneapolis and St. Paul have long traditions of effective human services
delivery and of the public and private sectors working together to address
local social service needs. These two organizations have involved schools,
social services agencies, family day care networks, parent consumer groups,
and local corporations to expand child care and Head Start. Much of their
programmatic activity resembles initiatives in California cities and counties,
combining community organizing and advocacy with resource and referral
and technical assistance to local child care centers and prospective family
day care providers. In contrast to the California experience, where local
initiatives grew out of a strong state structure, however, the developments
In Minneapolis and St. Paul have led the way for new Initiatives at the state
level.
These initiatives provide a great deal of encouragement that the dif-
ferences between programs, providers, and institutions can be bridged, but
they are by no means the rule In states and communities across the country.
Clearly they depend on both political will and the creation of an ~nfrastruc-
ture at state and local levels to plan and coordinate, to create networks,
to allocate resources, and to cover gaps in the existing array of service
delivery components. In the few states and local areas where planning and
coordination have occurred, there has been an increase In the supply of
child care and a more efficient allocation of funds.
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Representative terms from entire chapter:
day care
