Center for American Progress

5 Strategies for Equitable Implementation of Public Investments in Child Care

5 Strategies for Equitable Implementation of Public Investments in Child Care

States received an influx of funding from the American Rescue Plan Act to stabilize their child care industries. Key policy strategies that center equity ensure that these funds reach the people who need them most.

Three children playing with plastic toys seen from overhead
Children play together in the 3-year-olds class at a child care center in Baltimore, January 2021. (Getty/Matt Roth/The Washington Post)

Two years into the COVID-19 pandemic, the public health crisis and accompanying economic downturn have only intensified the realities of deep-rooted structural inequities that permeate early learning and child care systems in America. For generations, this country has woefully undervalued the critical work of caring for young children—work done disproportionality by women of color—creating an undersupplied early learning system that only the wealthiest can access.

One year ago, President Joe Biden signed into law the American Rescue Plan Act (ARPA), which included roughly $39 billion in emergency funding to stabilize states’ existing child care sectors. While this short-term investment extended a temporary lifeline to a child care industry that was already in crisis prior to the pandemic, hundreds of thousands of families still struggle to find and afford child care slots. Ultimately, the sector requires transformative structural change to equitably reach all families who need care.

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While lawmakers in D.C. continue to debate long-term child care reform, states used historic ARPA child care relief funds as an opportunity to expand access to child care and early learning in communities that have historically experienced underinvestment. Such communities include communities of color; parents of children with disabilities; infants and toddlers; families living in rural areas; and places with high concentrations of people living in poverty. The evidence is clear: Investing in early learning generates massive dividends for children, families, and the economy. As policymakers expand access to early learning for more families through current and future public investments, policies must account for the disproportionate challenges experienced by communities historically excluded from the system.

Compensating the workforce

Overwhelming evidence shows that adequate compensation and worker-friendly conditions help to reduce early educator turnover and economic insecurity. Both of these issues negatively affect the quality of child care services that families receive and dampen children’s opportunities to build meaningfully enriching relationships with their child care professional. Moreover, adequate compensation reduces turnover and helps sustain supply, meaning that providers have to worry less about having enough staff to provide care or potentially having to shut down because they do not have enough workers to meet demand. And, because our largely private child care system—and child care worker wages—rely heavily on parent tuition payments, child care providers serving historically underinvested communities feel the financial challenges of providing care most acutely. Twenty-eight states have earmarked a portion of ARPA child care relief dollars for increased child care worker wages or required providers to raise wages to qualify for stabilization grants. Ensuring increased wages for child care workers and early educators will not only improve the quality of care provided to families but will also begin to account for the woeful underinvestment in work traditionally done by women—specifically, women of color. The pandemic only intensified the socioeconomic disparities women have experienced for generations, and for a workforce made up predominantly of women—especially women of color—investments in compensation are all the more critical.

Improving data systems

Building and improving data infrastructure to collect disaggregated demographic, program, and workforce data can help policymakers identify which communities experience the greatest gaps in access. Policies can then target resources to early learning programs that, for example, serve children with disabilities; infants and toddlers; or dual-language learners as well as provide insight into workforce compensation and supports—another facet of the child care sector that is characterized by deep structural inequity. Yet, many states face extremely limited and inconsistent data collection processes that create challenges to accurately identifying these inequities. States including New York, Michigan, and Indiana implemented detailed tracking processes that communicated disaggregated data as it related to the distribution of ARPA stabilization grants. However, most states were limited in their ability to establish or expand data infrastructure. Policymakers have faced long-standing hurdles in creating a robust data infrastructure to track the needs of children, families, and providers due in part to variability in funding in early learning programs across localities. Long-term, states require federally supported and enhanced systemwide data infrastructure in the context of the broader early learning sector to bolster policymakers’ ability to identify inequities, target resources, and measure the impact of policy interventions.

Partnering with providers and parents

Parents and child care providers hold critical, firsthand perspectives about how to navigate and overcome barriers in their child care system. When tapped in a meaningful way, these insights can ensure that policy design and implementation plans address the barriers and challenges felt most acutely by marginalized communities. Some states used existing infrastructure to engage parents and providers, while others leveraged opportunities to partner with community-based intermediaries that hold trusted relationships with directly-impacted communities. States such as New Hampshire conducted a “multifaceted plan to gather input and recommendations” on how to spend ARPA child care funding and engaged hundreds of stakeholders, including parents and providers across the state. Meanwhile, other states such as Kansas, Minnesota, and Wisconsin worked closely with communities to ensure that resources were accessible and equitably distributed—whether that meant translating paperwork into multiple languages or reaching out directly to programs in underserved communities and offering technical assistance when applying for grant funding.

Targeting funding to underinvested communities

Affordability is a key aspect of equitable access to child care services. When determining how to distribute ARPA child care stabilization grants to providers, a number of states, including Connecticut, Massachusetts, and North Carolina, as well as Washington, D.C., created equity-adjusted formulas that take into account that historically underinvested communities require resources that reflect the inordinate challenges they face. The formulas used a variety of metrics to identify programs that would qualify for higher, equity-adjusted grant awards, including the Centers for Disease Control and Prevention’s Social Vulnerability Index; density of population served by Child Care and Development Block Grant (CCDBG) subsidies; and/or the number of children with disabilities or infants and toddlers served by the program. Providers serving families who meet these qualifications often operate in communities that have experienced decades of underinvestment or for whom finding child care is particularly challenging or costly. These barriers essentially bar these families from participating in their local economies by causing significant job disruptions to parents, especially mothers.

Calibrating support initiative to the true cost care

States can also use ARPA child care funds or future public investments to develop a child care cost model, which offers a more accurate estimation of costs associated with providing quality child care than market-rate estimations that reflect the status quo. Cost-model estimates can inform the process of setting CCDBG subsidy rates that reflect the additional resources required to provide care for infants and toddlers; children with disabilities; dual-language learners; and other groups historically excluded from the system. This approach can also factor in living wages for early educators or a full-time salary for family child care providers, who often scrape by on poverty wages reflected as sufficient in market-rate estimates. New Mexico and Washington, D.C., lead the way on this approach, having committed to paying subsidy rates that account for the true cost of care rather than the market rate. While states may require additional public funding to raise subsidy reimbursement rates that reflect the true cost of care, developing a cost-model takes a first and critical step at quantifying the level of resources required in communities across the state and subsequently providing a sound, empirically informed rationale for the expense.


Equitable distribution of public resources intended to expand access to early learning plays a critical role in addressing generations of deep-rooted structure inequity. Many states took the opportunity presented by the American Rescue Plan Act to prioritize equity in distributing this stopgap emergency investment. And thanks to this investment, more than 75,000 providers were saved from permanent closure, amounting to more than 3 million child care spots across the country. For minority-owned care facilities, this impact was felt even more deeply: Nationally, approximately 42 percent of providers say they would likely have shuttered without emergency relief, rising to 55 percent when looking specifically at minority-owned businesses. While impactful, this short-term funding cannot provide the kind of comprehensive reform that the child care sector requires, and the federal government must pass bold legislation to create early learning systems that families and the broader economy need to thrive.


The estimate of minority-owned businesses saved from permanent closure because of the infusion of rescue funds (55 percent) is extrapolated from a recent National Association for the Education of Young Children (NAEYC) report. However, nine states (Montana, Nebraska, Nevada, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming) lacked sufficient data to include in this analysis.

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MK Falgout

Former Policy Management Specialist

Hailey Gibbs

Senior Policy Analyst

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