Understanding Cost vs. Value

If you spend any time researching day care and child care, you’re likely familiar with the contentious side of the industry: Regulation. Child care is currently regulated via accreditation; the National Association for the Education of Young Children and the National Association for Family Child Care are the two most common accrediting organizations, but in some states, the Quality Rating and Improvement System is mandatory for licensed providers and programs that receive state subsidies.  

The added pressure on child care facilities and providers to maintain these strict licensures and accreditations translates to a higher cost of serving children. This cost is, in turn, passed on to the parents paying for day care.  

But doesn’t higher cost translate to a better value? And shouldn’t we hold day care facilities to the highest standards possible? Of course, but the issue is more nuanced than that.  

The Difference Between Cost and Quality 

GOVERNING article recently used a helpful example when explaining the issue. If the staff-to-child ration is more stringent (I.e. there are fewer children per staff member) and directors’ qualification requirements are increased, the quality of care provided would theoretically be higher. There might be more and better interactions between staff and kids, leading to a better learning and care environment.  

However, these regulations raise the cost of serving the children. These costs reduce supply (the number of children able to attend), increase prices, and encourage parents to use cheaper alternatives. Rather than passing this cost to parents, child care centers could try to pay staff lower wages, but that translates to attracting lower-quality providers to the industry. Plus, that could lower the quality of care instead of increasing it.  

So, what does this mean for parents? High cost doesn’t necessarily translate to higher quality care. In fact, high cost is becoming the baseline for most day care facilities as they struggle to maintain accreditation by cutting costs elsewhere. 

What Needs to Happen? 

In a perfect world, child care would be free and open to everyone. We’re pretty far away from that ideal, but in the meantime, there are a few things happening to help providers and parents alike.  

There is a strong push for state legislatures and regulators to liberalize day care regulations. That sounds dangerous – after all, regulations are designed to increase quality and safety – but it allows providers to operate more efficiently based on what the parents need and request. There is also a push for more widespread sliding scale options, which allow providers to retain accreditation while giving lower-income families the ability to pay what they can afford.  Federal subsidies can also help these providers supply high-quality care while decreasing the price passed to parents. 

Child care is a contentious issue, and there is no correct answer to funding, regulating, and subsidizing. More than anything, though, it helps to know the issues, especially if you’re about to enter the wild world of day care research.