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Licensed Child Care in Washington State: 2000

Executive Summary

Washington State's Department of Social and Health Services (DSHS) subsidized part of the child care costs for about 68,800 children each month in 2000. These children are from low-income families with parents who are working, going to school, homeless, or eligible based on some other DSHS program. The number of children receiving DSHS subsidies has tripled in the past decade. About two-thirds of children with DSHS-subsidized child care attend licensed family homes or child care centers.

Federal regulations require that Washington State tie their subsidy rates to a local market survey of child care rates conducted at least every two years. To comply with this regulation DSHS conducts a biennial survey of all child care centers and a sample of licensed family home providers. In addition to child care rates, the surveys provide information on the child care industry. This report describes the surveys conducted in early 2000. A total of 1,414 child care centers and 1,385 family home providers were interviewed.

Major Findings

• The price of child care has increased much faster than inflation in the past decade. From 1990 to 2000 the inflation-adjusted price of care increased 31 percent in centers and 28 percent in homes. That amounts to an annual rise in the price of care-after accounting for overall inflation-of 2.7 percent in centers and 2.5 percent in homes.

• From 1998 to 2000 the average price of center care after adjusting for inflation climbed by 7 percent (from $479 to $513) and that for full-time care in licensed family homes went up 6 percent (from $429 to $455). The annual inflation-adjusted price of care rose 3.5 percent in centers and 2.9 percent in homes in the two years 1998 to 2000.

• The proportion of children in licensed care whose care is subsidized by DSHS has risen substantially in recent years. After remaining at about 15 percent from 1990 through 1996, the proportion of children in licensed care subsidized by DSHS rose to 19 percent in 1998 and to 25 percent in 2000. In the four years between 1996 and 2000 the proportion of full-time children in licensed family homes that are subsidized by DSHS rose from 18 percent to 36 percent.

• The number of licensed family homes declined from 8,600 in 1996 to 7,159 in 2001, a decline of 17 percent. The decrease in family homes was greatest in King County-a loss of 770 licensed family homes in five years for a decline of 36 percent. The decline in number of family homes has been driven by both a decline in the number of new providers entering the business and an increase in the proportion of providers leaving the business.

• The 2000 surveys asked about staff turnover in child care centers-the number of individuals that had been hired in about the last six months. Approximately 18 percent of teachers and 40 percent of aides had been hired within the last six months. Annual attrition for employees of child care centers was estimated to be 53 percent using Employment Security data.

• Over the past eight years there has been a shift of the proportion of children in licensed care that are in licensed family homes. While 39 percent of children in licensed care attended licensed family homes in 1992, only 29 percent of children in licensed care attended licensed family homes in 2000.

• The 2000 surveys collected information on the number of children with special needs attending child care centers and homes. Approximately 60 percent of centers and 32 percent of homes served at least one child with special needs. Four percent of all children in centers and eight percent of children in licensed homes were identified as having special needs. The proportion of children identified by family home providers as having special needs varied from four percent of infants to almost ten percent of school-age children.

General Information:
Findings About Child Care Rates and the Child Care Market

• DSHS maximum subsidy rates in the spring of the 2000 were based on the 71^st percentile of the 1998 survey. But inflation in child care prices since the 1998 survey had effectively reduced the percentile of the market that DSHS bought to approximately the 50^th percentile by the time of the 2000 survey.

• Child care prices vary by geographic area, with child care prices in King County being higher than those in the rest of Western Washington and prices in Western Washington being higher than those in Eastern Washington. The wealth of a county is a strong predictor of child care prices: over forty percent of the variation in preschool rates in centers and over twenty-five percent of the variation in preschool rates in family homes is explained by county median household income.

• An estimated 164,300 children in Washington State were in licensed care in early 2000. Almost seventy percent of these children were in child care centers and the remaining thirty percent were in licensed family homes.

• Licensed providers grossed almost $750 million dollars in 2000 and employed approximately 29,000 people.

• Information from the child care surveys was combined with Census data to estimate the proportion of children of various ages in licensed care at the time of the child care surveys. About one out of every four preschoolers (children between 2.5 and 5.5), one out of every nine toddlers (children 12 to 29 months old), and one out of every ten infants (under 12 months old) were in licensed care at the time of the surveys in the spring of 2000.

Findings About Child Care Centers

• The number of children in child care centers grew 36 percent in ten years, rising from 85,000 in 1990 to 116,000 in 2000.

• Thirty-eight percent of children in child care centers in 2000 were preschoolers; 4 percent were infants.

• The vast majority of centers provide full-time care for preschool age children (71 percent), while only about one-third of centers provide full-time care for infants (34 percent).

• Fifty-four percent of children in centers in 2000 received full-time care (at least thirty hours per week).

• The proportion of centers with vacancies varied from 66 percent in 1996 to 57 percent in 1998 to 64 percent in 2000; the vacancy rate, which declined from 16 percent to 12 percent between 1996 and 1998, rose slightly to 12.6 percent in 2000.

• At the time of the 2000 survey, pay for teachers at centers averaged $8.66 per hour and that for aides averaged $7.33 per hour. Average real wages for child care workers (wages adjusted for inflation) stalled between 1992 and 1998. Since 1998, perhaps spurred by the increases in the minimum wage, average real wages for child care workers have risen.

• In the spring of 2000 only 10 percent of centers opened before 6 in the morning and 5 percent closed at 7 or later in the evening. Three percent of centers were open on the weekends.

Findings About Licensed Family Homes

• After a period of growth in the early 1990s, the number of children in licensed family homes declined from 60,100 in 1994 to 48,300 in 2000, a decline of 20 percent in six years.

• Thirty-five percent of children in licensed family homes in 2000 were preschoolers; 7 percent were infants.

• Most licensed family homes provide full-time child care for preschoolers (73 percent), while somewhat more than one-quarter of family homes provide full-time care for infants (29 percent).

• Fifty-seven percent of children in licensed family homes in 2000 received full-time care.

• Somewhat more than half of family homes (56 percent) had been in operation for four years or more.

• Forty-three percent of family homes in the spring of 2000 had vacancies, a rise from 37 percent in 1998. The 2000 vacancy rate of 15.5 percent for family homes was an increase in the vacancy rate in 1996 and 1998 of 14 percent.

• The share of family home providers with formal training in early child education or child development increased from 56 percent in 1994 to 82 percent in 2000.

• The average yearly income of family home providers increased at an annual rate of six percent in the four years from 1995 to 1999. Inflation adjusted income rose from $18,847 to $23,885. The longer a family home provider has been in business and the more the provider depends on child care as a source of income, the higher the provider's average earnings.

• At the time of the 2000 survey, 68 percent of family homes had liability insurance, compared to 69 percent in 1998 and 58 percent in 1996.

• Seventy-three percent of licensed family homes participated in the USDA food program in 2000, a decline from 77 percent in 1998.

• Eighteen percent of licensed family homes opened before 6 in the morning; 12 percent closed at 7 or later in the evening. Seventeen percent of licensed family homes were open on the weekend.

Findings About DSHS-Subsidized Child Care

• According to DSHS payment records, child care was subsidized for 130,000 children over the course of federal fiscal year 2000. In February through April 2000 an average 64,200 children had child care subsidized by DSHS. About 65 percent of these children, or 41,700, were cared for in a licensed family home or child care center.

• According to the 2000 child care surveys, an estimated 40,930 children received subsidized child care in either a licensed family home or child care center in early 2000.

• Twenty-three percent of children in centers and 29 percent of children in family homes received child care subsidized by DSHS in early 2000.

• At the time of the 2000 surveys, 84 percent of centers and 58 percent of licensed family homes cared for at least one DSHS-subsidized child.

• Statewide, 29 percent of children in licensed family homes in spring of 2000 were subsidized by DSHS; however, 73 percent of children cared for by Hispanic providers and 63 percent of all children cared for by black providers were subsidized by DSHS.

• In licensed family homes, children with subsidized child care were about twice as likely to be identified as having special needs compared to children whose care was not subsidized (13 percent versus 6 percent). In centers, the greater the proportion of children in a center receiving child care subsidies, the higher the proportion of children attending the center who have special needs (2.9 percent for centers with less than 10 percent subsidized by DSHS, 3.8 percent for centers with 10 to 25 percent subsidized children, and 6.5 percent of centers with over 25% subsidized children).

• Compared to licensed homes serving no DSHS subsidized children, homes with at least one DSHS child are much more likely to open before 6 a.m. (6 versus 25 percent) and close after 6 p.m. (5 versus 25 percent). Centers with high proportions of subsidized children are more likely to open before 6 a.m. and somewhat more likely to close after 6 p.m. than centers that serve few children with subsidized child care.

Modified: Thursday November 17 2005

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