Expanding Access to High-Quality Early Care and Education through a Racial Equity Lens

High-Quality ECE Generates the Largest Gains for Black and Hispanic Children

By Saras Chung, Sam Evans, Ana Hernández Kent, and Jessica Coria

This article is part of a series produced by the Federal Reserve’s Early Care and Education (ECE) Work Group that explores the cost, affordability and racial equity issues in ECE. As the series' overview blog post explains, the first three articles use existing research and data to frame each of these issues in turn. The series concludes with this article, which explores these topics using findings from human-centered-design focus groups conducted with ECE providers and parents of young children. Quotations in this article are from ECE providers and parents who attended the focus groups.

Executive Summary

Child care is important for cultivating the future workforce. It also ensures that working parents of today can participate in the economy. Long-standing and widespread constraints in the child care sector are compounded by the current COVID-19 crisis, heightening the urgency to address structural issues in the child care ecosystem that limit the ability of low-income working parents to access affordable, quality care for their kids. Although these challenges affect the majority of low-income parents, Black and Hispanic parents have experienced higher levels of child care disruptions, leading many to report working less or not working at all.

Supporting Black and Hispanic parents’ reentry into the workforce is critical for the livelihoods of their families and carries the potential to impact future generations. This moment provides an opportunity to pause and consider the barriers to high-quality early care and education, focusing specifically on the racial inequities present in the sector. Addressing the barriers using a racial equity lens can lead to greater access to high-quality care for families of color and the creation of a resilient child care ecosystem that will enable the full potential of our economy. The primary factors preventing Black and Hispanic parents from accessing high-quality ECE include accessibility and affordability. Black and Hispanic parents are more often living in segregated neighborhoods (PDF), making it harder for them to access high-quality ECE. Additionally, parents of color reported considering diverse cultural and linguistic care opportunities as high priorities, which may be even more difficult to locate.

This article examines how Black and Hispanic children are currently receiving ECE, the workforce and providers who serve Black and Hispanic children with care and the challenges they face, and what it would mean to create racial equity for Black and Hispanic families searching for high-quality ECE.

High-Quality ECE Provides Greater Economic Benefits for Black and Hispanic Children and Families

ECE encompasses the holistic development of a child’s social, emotional, cognitive and physical needs. High-quality ECE can provide both immediate and long-lasting economic benefits for families and communities over generations. Parents, particularly women, can increase their earnings by having access to high-quality ECE. (Nationally, problems with a lack of child care cost all parents $8.3 billion in lost wages per year.) This immediate benefit is especially relevant for Black mothers who contribute at least a quarter of total household earnings, at a rate of 85% versus 64% for all mothers. ECE participation can increase mothers’ income and labor force participation, and can reduce racial disparities by improving employment outcomes for women of color who disproportionately work in low-wage jobs.

Research shows that children, particularly those from disadvantaged environments, who attend high-quality ECE have improved outcomes later in life, including higher education and wages, better health and lower crime rates.

Meeting the Access Needs of Black and Hispanic Families for High-Quality ECE

While many families would benefit from high-quality ECE, racial equity efforts are likely to be most impactful when targeted toward those who have the least access. People in low-wage jobs (typically paying $11 per hour or less) needing high-quality ECE, for example, are mostly women and disproportionately Black or Hispanic (PDF). They are also more likely to be one-income households (PDF) or have lower education levels —i.e., less than a bachelor’s degree or no more than a high school diploma. Their dependence on income from employment is critical because many are also raising children alone or with one source of wages.

Yet many ECE options are simply not set up to meet the needs of families who would most benefit. Over half (51%) of people in the U.S. live in what is deemed a child care desert, defined as a census tract with more than three children under age 5 for every licensed child care slot. Child care supply is especially low among certain populations, with 57% of Hispanic families, 44% of Black families and 54% of those living in the lowest-income neighborhoods lacking sufficient licensed or regulated child care providers to meet the needs of these families. Parents in low-wage jobs may work nonstandard or irregular hours that require evening or weekend support (PDF). The number of providers who are either licensed or regulated to provide child care has decreased further during the pandemic. Even prior to 2020, however, high-quality care was often inaccessible to those making lower wages because of its unaffordability and, in some cases, unavailability, particularly for infants and families living in rural locations (PDF)

This lack of access to high-quality child care can lead parents to make different educational or employment decisions. A survey conducted in 2018 showed half of Black mothers and nearly half of Hispanic mothers would look for a higher-paying job if they had access to more affordable and reliable child care. This was also reflected in comments made during the parent focus groups held for this series of articles:

Many businesses do not provide support or payments for child care for workers at lower-wage levels. Additionally, employer assistance that covers partial or full costs of day care is not a widely distributed benefit. According to 2020 data from the Bureau of Labor Statistics (PDF), just 11% of all workers have access to employer-provided child care, and those with lower incomes (predominantly workers of color) are much less likely to receive that benefit.

If a family secures a much-coveted ECE slot, applying for child care reimbursements or subsidies provided through government programs often requires time, linguistic and/or literacy supports, and extensive paperwork to substantiate the need for care. These requirements can create barriers for participation, particularly for less-educated families, women of color and undocumented families. Access to child care subsidies, for instance, requires families to remain at a certain low threshold of income, and demands documentation of child support income, pay stubs, certification of employment or other forms. These barriers have been shown to deter providers and families that may be reluctant to interact with government agencies. Furthermore, it creates a benefits cliff, whereby families who increase their incomes enough may no longer be eligible for subsidies but also may not make enough to pay for child care on their own.

The sacrifice that Black and Hispanic parents make to attain child care is a complex problem fraught with competing challenges. Understanding the conundrums parents and families face and addressing the issues that the ECE workforce and providers experience in trying to provide more seats and quality care can foster a more racially equitable ECE.

ECE Workers and Settings Currently Meeting Black and Hispanic Family Needs

One of the main considerations for parents when choosing an ECE provider is affordability, which can also be defined by low-income parents and specifically Black and Hispanic parents as acceptance of a subsidy or voucher. This can mean parents are limited in their choice of ECE providers, and Black and Hispanic children are less likely to be enrolled in high-quality ECE settings:

One particular reason for high-quality care being out of reach is that providers receiving higher reimbursement rates from government funding sources have higher quality (PDF). Higher reimbursement rates allow ECE providers to cover increased costs of elements of high quality, specifically those related to employing a more experienced and educated workforce.

Historically, child care has been largely provided through the unpaid or low-wage labor of women, often women of color, and this legacy may play a role in why child care work has been and continues to be highly undervalued and underpaid. These educators face numerous barriers to participating in large-scale government and philanthropic efforts to scale ECE.

Black women made up 12% of the child care labor force in 2021, while Hispanic women/Latinas made up 22%. Wages in the ECE system are some of the lowest in the U.S. relative to qualifications and skill sets. The median hourly wage for a child care worker in 2020 was $12.24, for an annualized wage of $25,460, which is less than the federal poverty line for a household of four in the U.S. Additional pay disparities exist, particularly for Black providers, who are paid on average $0.78 less per hour than their white peers (PDF). Nearly a quarter (23%) of Black female child care workers and 16% of Hispanic female child care workers were below the poverty line in 2021, compared with less than 10% of their white female peers.

Unregulated or unlicensed providers often do not meet the eligibility requirements to benefit from federal, state or local efforts to improve quality. For instance, many philanthropic or federal/state ECE grants require a 501(c)(3) status or licensure, or systematically omit a key portion of providers offering in-home care. Unfortunately, even many of these types of ECE settings are closing, providing fewer options for care. For instance, more than 90,000 licensed family child care homes closed (PDF) in the United States between 2005-2017, representing a decrease of 22%. The closures sparked by the COVID-19 pandemic further accelerated the shortage of care centers, with one-third remaining closed as of April 2021.

These closures disproportionately affected nonwhite families, with Black and Hispanic parents more likely to experience disrupted access to child care than white parents. Furthermore, ECE closures, reduced hours and layoffs that occurred during the initial months of the pandemic had an outsized effect on workers who were women of color, given that they were disproportionately represented in the child care labor force. Using data from the IPUMS Current Population Survey, we found that Black and Hispanic/Latina women also suffered from higher unemployment rates during the months following the COVID-19 recession. For the women of color in ECE who retained or regained employment, challenges remain.

Providers serving families in predominantly Black and Hispanic communities are often posed a difficult task: hire qualified teachers; pay them better; and provide great care with limited funds, reimbursement models that are challenging to navigate and uneven access to additional investments. ECE providers serving more-affluent communities may charge more for care, passing the cost onto families who can pay. However, most families in poverty cannot afford to pay the true cost of quality care. Without external intervention and support, these difficulties can become more entrenched over time.

The Case for Listening and Learning How Racial Inequities Are Perpetuated in ECE

The examples outlined above are a sample of the many complex challenges faced by Black and Hispanic families and the ECE workforce and providers who serve them. The people who are most affected by the current system are most intimately aware of how the system breaks down. Centering responses on their voices and experiences is a best practice for addressing inequities that disproportionately affect Black and Hispanic families.

Cultural Competency

ECE providers acknowledge the importance of diversity and cultural involvement in their settings. As one provider stated in our focus group, “Multilingual and cultural [are] very important [elements of] diversity.” Research also links the benefits of maintaining continuity (PDF) of cultural and linguistic characteristics and experiences between children’s homes and their early childhood settings. Yet challenges remain prevalent for families in accessing high-quality ECE that affirms racial identity and culturally diverse settings. For example, in a recent parent feedback survey conducted by California’s Health and Human Services Agency, some parents felt the need to find a new child care arrangement because of a lack of cultural competence on the part of the staff, which led to instances of children being bullied by fellow students or harassed by the staff. When moved, these same children began to thrive in their new settings.

Research also shows that Black children are disproportionately disciplined (PDF) and expelled at higher rates than their white counterparts from early educational settings, limiting their future developmental and educational success. Programs such as Head Start and Early Head Start work not only to support dual-language learners but also to create settings that foster quality care for diverse communities by targeting resources directly to low-income communities while incorporating cultural, linguistic and quality provisions. Other programs have focused on increasing quality standards to incorporate anti-bias training, program policies to prohibit suspension and expulsion, as well as teacher coaching and other supports in the classroom.

Conclusion

The challenges to providing care for those who most need it are not insurmountable. Considering racial equity and the way in which Black and Hispanic children, parents, ECE workers and providers often navigate current systems of support is a first step to effectively scaling ECE. The consideration of the experiences of those who are most disenfranchised by current systems and adapting those systems to respond to their needs can support a more racially equitable ECE. Listening, learning and responding can be best practices for creating an equitable ECE system that benefits the economy, communities, families and children the system seeks to serve.

The views expressed in this document are those of the authors and do not necessarily reflect the position of the Federal Reserve System, the Board of Governors or the regional Federal Reserve banks.

The Economic Impact of Child Care by State

Get child care data for all 50 states, including:

• child care affordability estimates
• data on the percentage of single parents
• labor force participation rates
• statistics about workforce-related struggles facing child care providers

Fact sheets prepared by Federal Reserve Bank of St. Louis researchers.