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Promoting sustainability of child care programs during the COVID-19 pandemic: Considerations for states in allocating financial resources

The goals of this paper are twofold. First, the paper provides basic background information about the structure of child care costs and revenues and clearly shows how the pandemic and associated changes in regulations and demand have affected them. This section of the paper describes the different types of costs in child care programs (e.g., overhead costs and those that vary with enrollment) and the differential effects of the pandemic on these costs. This section also discusses typical revenue structures of programs and the link between enrollment changes and revenues. It outlines different cost and revenue scenarios to demonstrate how shifts related to COVID-19 (e.g., changes in required ratios or square footage guidelines) and how resources such as grants and loans impact the bottom line for programs. The paper provides basic information to describe how different levels of demand affect program costs and revenues. Second, the paper describes implementation issues for allocating financial resources to child care programs and offers considerations related to implementation (e.g., considerations related to determining program eligibility for grants, selection criteria for grants, and calculation of award amounts). The document also addresses using available administrative data, program self-report data, and family survey data to document how changes in the supply of child care impact families’ access. (author abstract)
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