Q&A: Policy-Collaborative Executive Discusses Child Care’s Impact on the Arkansas Economy

Research from the Institute for Economic Equity has highlighted child care as a key ingredient for children’s healthy development and their parents’ ability to participate in the workforce. In Arkansas, most workers are also parents (53%), and 37% of those working parents have young children. Mothers with young children in particular have a much lower labor force participation rate (67%) compared with fathers of young children (94%).Calculated by Ana Hernández Kent, a senior researcher for the St. Louis Fed’s Institute for Economic Equity, using the IPUMS Current Population Survey. Data are not seasonally adjusted. Mothers and fathers of young children are defined as those age 25-54 residing with their children under age 6. In addition, the cost of child care is a challenge. In Arkansas, it can be approximately 11% of household income,Statistic calculated by St. Louis Fed Senior Economist Charles Gascon and Research Associate Ngan Tran using the IPUMS Current Population Survey. Average cost was rounded to the nearest 100 and calculated at the median household income level. making it one of the largest expenditures for a household with children.

Angela Duran, Excel by Eight

To better understand the challenges and current state of child care in Arkansas, I interviewed Angela Duran, who serves as the executive director of Excel by Eight. Excel by Eight recently convened a coalition of chambers of commerce, economic development organizations and philanthropic groups to create the Arkansas Early Childhood Education Task Force, and Duran shared the impetus for the group’s coming together, its findings on the state of early childhood education in Arkansas, and potential opportunities around access to affordable, quality child care.Child care and early care and education are used interchangeably to include a variety of program types, such as center-based child care, home-based or family child care, private preschool, public preschool, and Head Start and Early Head Start.

Responses were edited for length and clarity.

Question: Can you describe Excel by Eight’s mission and the driving factors for convening the Arkansas Early Childhood Education Task Force?

Duran: Excel by Eight’s mission is to partner with families and communities to improve health and education outcomes for children in Arkansas. One of the areas where we focus is early care and education. A few years ago, business and philanthropic leaders identified challenges within child care [as an obstacle] to a growing Arkansas economy. I think the leaders of the task force, particularly those from the chambers of commerce, were hearing from their members that employees were having trouble getting to work on a regular basis because of the unreliability of child care before and during the COVID-19 pandemic. And sometimes there just isn’t the quality of care, and parents don’t feel comfortable leaving their child in a particular setting—it’s not the quality level they want it to be.

So, a lot of what we’ve been talking about is the importance of child care to our overall economy. It’s important to the bottom line of local businesses. It’s important to the sustainability of families, so that parents can go to work and make enough money to support their families. More-stable enrollment helps child care providers. All those things ripple throughout our economy. A stronger economy also leads to greater incomes and additional tax revenue that can support investments in our communities.

Question: What were some of the task force’s initial findings?

Duran: The task force looked at a range of recommendations foundational to supporting a strong child care system. Some of the initial findings showed that for the approximately 99,000 Arkansas children ages 4 and under that come from low-income families, government funding can meet the needs of only about half (52,000) of them.

The task force also learned that, nationally, the child care market is mostly (85%-90%) small businesses and nonprofits, yet in Arkansas the workforce is undertrained, undercompensated and under-resourced.

We heard from child care directors around the state that they can’t keep staff, but one of the challenges is that budgets for child care providers are based on what parents can afford to pay and on what public funding sources will pay. So, based on those budgets, they’re not able to offer health insurance and other benefits.

In a 2017 survey of Arkansas early childhood educators and program administrators, the University of Arkansas for Medical Sciences found that, on average, child care workers made between $16,500 and $23,100 per year less than kindergarten teachers; 58% of them had trouble meeting basic needs in the previous year; 47% were not offered health insurance; and 35% screened as being at risk for depression.See the University of Arkansas for Medical Sciences report “2017 Arkansas Workforce Study: Instructional Staff in Child Care and Early Childhood Education” (PDF) by Lorraine McKelvey, Andrew Forsman, Jamie Morrison-Ward and Rezwana Choudhury. I’m sure these numbers have increased since the beginning of the COVID-19 pandemic, based on what we’ve heard from child care directors on the increase in cost of supplies and retaining staff.

Question: What were some of the bright spots in the task force’s findings?

Duran: The good thing is that, over the last 10 years or so, Arkansas has made historic investments in its pre-K program. As a result, between those investments and Head Start, a significant part (almost half) of preschool slots are very high quality. The supply and quality of infant and toddler slots presents more of a struggle. Demand in the state for infant and toddler care far exceeds supply; only 1 in 10 parents can find high-quality child care for their infants and toddlers.

A large part of American Rescue Plan funding proposed to increase the supply of licensed providers and to shore up resources, as well as to provide opportunities for early childhood teachers to obtain a degree or credential in the field utilizing the national T.E.A.C.H. Early Childhood® model. However, these funds are temporary and set to expire in 2024.

Question: Providing child care in rural areas involves unique challenges because of the business model’s heavy reliance on sufficient population density and parents’ ability to pay. Being that Arkansas is largely rural, has your task force identified this issue?

Duran: Yes, particularly for infant and toddler care. Only a handful of counties come close to meeting the demand. I’ve presented data that showed just 4 in 10 working parents could find licensed care for their infants and toddlers. In more rural areas, it’s particularly difficult. In the southwestern corner of the state, for example, in Sevier County, only 12% of parents could find infant and toddler care.Calculated by Angela Duran, executive director of Excel by Eight, using data from the Arkansas Department of Human Services Division of Child Care and Early Childhood Education and the U.S. Census, 2014-18 American Community Survey, 5-Year Estimates. But these data were amassed before COVID-19, which means that the situation is likely worse now, given the pandemic and the rising cost of child care.

Next Steps

The Arkansas Early Childhood Education Task Force continues to host community conversations, including a roundtable this fall with business and industry leaders. The roundtable will be in partnership with the Federal Reserve Bank of St. Louis, and it is intended to discuss and evaluate barriers to the availability of affordable child care.

The task force hopes to release a set of recommendations later this year.

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.

Notes and References

1. Calculated by Ana Hernández Kent, a senior researcher for the St. Louis Fed’s Institute for Economic Equity, using the IPUMS Current Population Survey. Data are not seasonally adjusted. Mothers and fathers of young children are defined as those age 25-54 residing with their children under age 6.
2. Statistic calculated by St. Louis Fed Senior Economist Charles Gascon and Research Associate Ngan Tran using the IPUMS Current Population Survey. Average cost was rounded to the nearest 100 and calculated at the median household income level.
3. Child care and early care and education are used interchangeably to include a variety of program types, such as center-based child care, home-based or family child care, private preschool, public preschool, and Head Start and Early Head Start.
4. See the University of Arkansas for Medical Sciences report “2017 Arkansas Workforce Study: Instructional Staff in Child Care and Early Childhood Education” (PDF) by Lorraine McKelvey, Andrew Forsman, Jamie Morrison-Ward and Rezwana Choudhury.
5. Calculated by Angela Duran, executive director of Excel by Eight, using data from the Arkansas Department of Human Services Division of Child Care and Early Childhood Education and the U.S. Census, 2014-18 American Community Survey, 5-Year Estimates.