0. Executive Summary

In the United States, child care has historically received far less public investment than K–12 education and less private investment than areas like education and health care. U.S. investment in early care and education (ECE) for children aged zero to five is among the lowest of all Organization for Economic Cooperation and Development (OECD) countries. Market solutions, like relying on individual proprietors to meet the growing needs for care out of self-interest, have utterly failed. Even public efforts designed to help qualifying parents pay for the cost of child care—the Child and Dependent Care Credit for instance—haven’t kept up with the soaring costs of child care, have failed to keep thousands of providers open, and aren’t designed to help those least able to pay. As a result, innovation has lagged—impeding efforts to create an accessible, high-quality universal system with a variety of choices that meet family needs and offer widespread benefits to children, families, communities, society, and the economy.

The COVID-19 pandemic put a spotlight on child care as a necessary public good for U.S. children and critical for a functional workforce. Though some relief came to the child care sector through the American Rescue Plan, Congress has failed to expand the current funding mechanisms, shore up the early education workforce, and propose infrastructure for a fairer and more accessible system. As a result of the unmet needs on display during the pandemic, private for-profit and philanthropic investment in child care innovations has increased—without centralized policy or infrastructure meant to ensure these investments will benefit families most in need.

In dozens of interviews conducted for this report with providers, parents, innovators, advocates, and experts, a clear policy goal emerged: offer child care as a public good, and commit to investing public funds to improve quality for children, provide reliable coverage that meets families’ needs, and offer living wages, benefits, training, and support to educators and providers. We cannot rely on the private sector alone to be the solution, as market incentives from either the supply or demand side cannot fully cover the cost and complexity of universal care. However, some innovations from both the private and public sectors—or in some cases, a collaborative effort—show the potential for particular interventions to improve the current state of and increase general access to child care in the absence of major federal policy change, particularly if given the resources and attention they need to thrive and scale.

Individual families and providers cannot be expected to shoulder the responsibility of the child care system alone. We found some small pilots and individual innovations in the field that helped certain groups, which could be a part of a well-functioning system. But taken on their own, they’re not enough to build a universal system. For instance, new apps to help parents find nearby child care options may be valuable, but they don’t help increase the supply of child care on offer, especially after pandemic-era closures. Building an infrastructure that meets families’ needs, particularly in child care deserts, will require robust federal and state investment and inclusive design to transform the fragile, unsustainable economics of the existing child care system.

Questions raised for discussion:

• What would realistic solutions to the current child care challenges include?
• What current innovations exist that could improve the current child care system?
• What public policy changes can be scaled or spread to other states and localities?
• How can the United States move from the uneven, unequal, and expensive patchwork child care system it has now to a universal, affordable, and equitable model, which also pays its teachers and care providers living and dignified wages?

The Better Life Lab and its partners embarked on a year-long solutions reporting project to find out the best answers to these questions, based on the experience and wisdom of child care providers, advocates, researchers, and parents today. We have identified five important areas of innovation and noted 25 innovations across these areas, both to emphasize the promise of thinkers and builders already engaged in these discussions and to highlight the need for even further attention and investment in these spaces.

Our deep dive into child care innovations found several areas of notable progress. These included efforts to:

• Increase both public and private investment into early childhood education;
• Incentivize and support a wide variety of settings for early learning and care that meet families’ needs and preferences, including home-based and informal care providers;
• Centralize and subsidize administration and program management of diverse child care providers in order to ease the burden on providers;
• Restructure early education settings to be accountable to the needs of an increasingly diverse U.S. child care population by providing holistic care that centers both academic and social-emotional needs and supports entire families, not just individual children; and
• Expand and increase public subsidies and reform the subsidy model to make high-quality early education accessible and affordable to more families.