Federal pandemic relief funds meant to assist parents with the costs of childcare expired in the latter part of 2023, causing states to grapple with a “childcare cliff.” Kentucky adopted an innovative proposal that allowed many children to stay in daycare and parents to remain in the workforce. In Kentucky, the state pays for childcare for all childcare workers, regardless of household income.
Kentucky’s Innovative Proposal
The proposal in Kentucky has largely been seen as a success. Prior to this current program, the pay rate for childcare workers was often prohibitively low if that worker also had a child in need of care. Generally, children of daycare workers are not able to attend the daycare for free.
State-Pay Benefit for Childcare Workers
In Kentucky, parents who wish to work in childcare can have their child attend under the state-pay benefit. The benefit may or may not be accepted at private childcare centers.
Impact on Workforce and Childcare Availability
This move boosts the number of workers interested in childcare services and provides more spots for children of moms who labor outside of that sector.
National Childcare Crisis
There is a crisis nationwide due to a lack of access to childcare facilities. If no childcare spots are available, parents have a significantly more difficult time working and keeping a job.
Decline in Childcare Accessibility
In Kentucky, specifically, the pandemic ushered in a significant decline in the amount of children receiving state-subsidized child care from 30,000 to 17,000. This decline was due to the number of daycare spots available, not because fewer children required care.
Pandemic Impact on Daycare Availability
The number of daycare spots available during the COVID-19 pandemic decreased drastically partly because there were decreased adult-to-child ratios to attempt to curtail the spread of the virus.
Competition for Employees
Another reason there were significantly fewer daycare slots available was due to high competition for employees from other sectors, as the job market had low unemployment levels across most industries.
Challenges in Attracting Childcare Labor
When workers have many options at their disposal, childcare jobs are often less attractive due to their difficulty, low pay, and perceived low status. Ironically and critically, childcare roles make the other industry roles possible. If childcare positions cannot be filled, parents across other industries cannot perform well at their work.
Recovery in Daycare Attendance
After Kentucky addressed the staffing shortages at daycare facilities by paying for the children of staff members to attend, the number of children in daycare in Kentucky returned to 40,000, up 10,000 from the previous pre-pandemic number. The number of workers’ children who now qualified for free care made up 3,600 of the 40,000 children in daycare.
Cost and Effectiveness of Kentucky’s Approach
Kentucky’s approach is costly. While childcare costs vary widely in different regions, Kentucky pays over $200 weekly in many counties per child for care. The highest cost is for infants due to the lower worker-to-child ratio and the intensive care required compared to more independent preschool-aged children.
Program Outcomes and Future Projections
Despite the large financial outlay, the program seems to have been successful, as childcare centers have fully staffed their facilities, allowing maximum children to access daycare and their parents to work. Time will tell if the economic boost from reliable childcare to earned income to tax dollars will show a net positive impact on the state’s balance sheet.
Interest from Other States
At least 30 other states have expressed interest in implementing Kentucky’s model in their state. It is in the interest of both businesses and the state for parents to be able to work without worrying about childcare. Many parents, especially mothers, would like to take a job and bring in an income, but can only do so when knowing their children are well cared for in a reliable and stable daycare facility.
Long-Term Policy Considerations
Policymakers are eyeing Kentucky’s innovative model over the medium and long term to see how the state can assist in procuring and retaining daycare workers. Through the COVID-19 pandemic and its aftermath, the economy has seen the critical nature of ample, affordable, and reliable childcare provisions for parents, specifically mothers, to work and contribute financially to their households.
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