Nine Ideas to Make Progress on Child Care

The American economy runs on working parents, but the child care system too often pulls the rug out from under them. Prices climb faster than paychecks, and care options rarely match the realities of modern work schedules. The strain is widely acknowledged in Washington, yet meaningful action has lagged. In the meantime, families are left to patch together solutions on their own—juggling work, piecing together care, and absorbing the costs when the system falls short.

Child care should be a governing priority, not just a campaign talking point. While a comprehensive, universal child care system may not be politically achievable in the near term, there are clear opportunities to improve child care now—by expanding supply, increasing flexibility, and strengthening the system. These steps can support families today while laying the groundwork for broader reform in the future.

In this report, we outline nine practical, supply-oriented steps to strengthen child care in America and better support three key groups: providers, parents, and workers.

Child Care Providers

1. Cut red tape that does not improve child health, safety, or care quality
2. Invest in bolstering child care facilities 
3. Help child care providers start and grow their businesses 

Parents

4. Design child care that works for a 24/7 economy
5. Minimize the likelihood of a child care emergency
6. Make it easier to find and keep care

Child Care Workers

7. Develop pathways into and beyond early childhood jobs
8. Improve job quality and compensation
9. Build shared staffing solutions

Support Child Care Providers

Over 4.2 million children lack access to a formal child care slot, leaving families scrambling and constraining the broader economy.¹ At the center of this gap are licensed child care providers—both centers and family-based programs—who don’t have the capacity to meet demand. Expanding supply is difficult because providers face steep regulatory, financial, and operational barriers to starting and sustaining programs. Addressing this shortage will require policymakers to reduce unnecessary burdens and make it easier for providers to grow.

1. Cut Red Tape That Does Not Improve Child Health, Safety, or Care Quality

State and local governments have constructed a complex web of regulations that limit child care availability without meaningfully improving care quality. Burdensome administrative requirements, inconsistent licensing rules, and restrictive local zoning laws make it harder for providers to open, operate, and expand child care programs.² Policymakers should focus on maintaining strong safety and quality standards in child care while reducing unnecessary barriers that constrain supply. 

Develop a national minimum regulatory standard. Child care regulations vary widely across states and localities, but many don’t improve the quality or safety of care. For example, requiring providers to hold a bachelor’s degree or offer a minimum number of parking spaces doesn’t make kids safer—it puts up unnecessary operational hurdles.³ A national minimum quality standard should define consistent core protections while encouraging states to modernize and streamline other requirements to meet a high standard of care. A federal framework could include: 

• Baseline health and safety standards.
• Updated zoning laws that allow home-based providers to operate in residential areas and to advertise their services.⁴
• Simplified licensing processes and fees. 
• Skills-based hiring pathways for those who complete training programs, certificates, or associate’s degrees in early education.

A clearer, more consistent baseline will reduce unnecessary regulatory variations and boost parental confidence while still allowing states and localities the flexibility to meet local needs.

Reduce administrative burdens. Many regulatory requirements—like staff background checks and safety inspections—are essential, but compliance often takes significant time and resources, particularly for smaller providers. Lawmakers can help make compliance easier, less costly, and more efficient by:

• Expanding technical assistance programs to help providers navigate burdensome requirements like licensing applications, regulatory compliance, and mandatory trainings.⁵
• Streamlining duplicative reporting and documentation processes and increasing the use of digital tools.⁶
• Extending the role of licensors to include being a main point of contact for providers’ licensing questions and support needs, helping them comply with regulations more consistently.⁷

2. Invest in Child Care Facilities and Providers

Running a child care business is expensive.⁸ Federal funding is sparse, and private grants and funds are difficult to find and even harder to access.⁹ This is especially true for groups that have historically been excluded from the country’s financial system—particularly women and people of color, who also make up the majority of child care providers in the United States.¹⁰ Providers need to access and grow financial capital to remain operational. To help providers attain stronger financial footing, federal lawmakers can:

Create new tax credits and financial incentives. Federal lawmakers can introduce:

• A federal tax credit for providers running in-home programs, which have declined significantly in the last decade.¹¹ This would be especially helpful amid rising housing and insurance costs.¹² For example, Maryland counties and municipalities provide property tax credits to center- and home-based child care providers.¹³
• A tax credit or other financial incentive for private companies that partner with and fund child care providers.¹⁴ For example, Iowa’s Child Care Business Incentive provides financing to businesses that create or expand local child care centers.¹⁵

Design and support special funding terms for child care. Many providers struggle to find and navigate programs that help fund child care.¹⁶ Most can’t afford to take on loan debt, and the available grants are usually too small to cover their expenses—especially start-up and maintenance costs.¹⁷ Federal policymakers can offer more favorable terms on grants and loans for child care providers. For example, loans could have deferred payment schedules and low interest rates. These efforts can be targeted towards: 

• Providers in groups historically blocked from accessing capital, such as women and people of color. 
• Providers facing the highest operational costs, specifically those in urban areas and high-cost-of-living states.¹⁸ Funds could be earmarked for most providers’ most expensive line items, such as facility establishment and maintenance.¹⁹

Improve outreach and awareness. Providers are frequently confused by or unaware of available financial support.²⁰ Policymakers can work to ensure this information is widespread and accessible through:

• An online federal resource hub that provides key information ranging from child care tax provisions and how to access them, to understanding important administrative forms. 
• State awareness efforts. Lawmakers can require state and local governments to regularly distribute funding information to providers in their jurisdictions.
• Translation of key materials into other languages to ensure all communities can access provider benefits. 

3. Help Child Care Providers Start and Grow Their Businesses

Running a child care business requires specific skills, such as financial literacy and marketing. However, few providers have formal training in these areas.²¹ This lack of knowledge can result in them losing money, closing, and even leaving the sector.²² Fortunately, providers don’t need an MBA to solve these problems. They just require support from lawmakers, who should:

Increase funding for Women’s Business Centers (WBCs). The Small Business Association’s WBCs provide low-cost small business training for women on topics such as financial operations and marketing.²³ Since most child care providers are women, increasing WBC funding could help more providers gain important business skills. 

Develop and fund SBA Child Care Office(s). A national SBA Child Care Office could oversee a network of state agencies that offer low-cost, relevant business training to child care providers. Some states have already taken similar steps. For example, Wisconsin has developed an interactive “roadmap” to child care regulation for providers.²⁴

Fund shared services networks. Many providers are too busy to obtain a degree and perfect their business operations. To reduce that burden, lawmakers can provide funding to states and localities to set up shared services networks where multiple providers utilize the same administrative services or staff. Sharing resources like HR and IT allows providers to save both money and time. In other sectors with small budgets, such as the non-profit space, organizations have taken this approach and seen significant benefits. With federal support to launch and help sustain these efforts, while providing flexibility to states to implement, child care providers could utilize shared services networks to save time, money, and better navigate administrative requirements.²⁵

Support Parents

Parents depend on child care to work, but too many families struggle to find care that is affordable, available, and aligned with their schedules. These gaps are especially challenging in a labor market that increasingly demands flexibility from workers, which can force parents to reduce their hours or leave jobs altogether. To ensure parents can easily find the balance between work and care, policymakers should focus on expanding options, improving reliability, and making it easier for families to find and keep child care that works for their needs.²⁶

4. Help Child Care Work for a 24/7 Workforce 

Our recent polling found that 27% of parents with young children work non-traditional schedules—that is, outside the typical nine-to-five—and just half know their schedules more than a month in advance.²⁷ Yet only 8% of child care centers and a third of home-based programs are open outside traditional working hours.²⁸ Federal policy should help modernize child care options to reflect the realities of today’s job market. 

Create a blended care option for families. Current child care subsidy rules assume that families rely on a single, fixed provider. But many working parents—especially those in health care, logistics, and other shift-based industries—often use multiple care arrangements to accommodate irregular schedules. When work hours change or unexpected shifts arise, parents must choose between paying out-of-pocket for supplemental care or trying to find another care option that best suits them. Congress could address this gap by creating a blended care subsidy option that allows families to designate both a primary and supplemental provider for reimbursement.

Under a blended care model, families could receive federal support for both a primary provider and a pre-approved supplemental provider for evenings, overnights, or last-minute schedule changes. For example, a nurse who typically uses a daytime child care center but is called in for a night shift could temporarily rely on a nearby home-based provider offering overnight care that would be covered by the subsidy.

Congress could do this by reforming the existing Child Care and Development Fund (CCDF) to:

• Allow families to designate both a primary and supplemental provider within a subsidy authorization period.
• Maintain regular payments to the primary provider, preserving enrollment stability.
• Provide flexible reimbursement or stipends for supplemental providers who offer short-notice or irregular-hour care.
• Permit states to approve informal caregivers as supplemental providers if they meet basic health and safety standards.
• Encourage states to pilot blended care models in industries where nontraditional schedules are more common.

Modernize CCDF reimbursement for off-hours care. Providers operating outside traditional hours or on variable schedules face higher staffing and operational expenses, yet federal reimbursement rates rarely reflect those costs.²⁹ To alleviate these issues, Congress could reform CCDF to:

• Allow for and encourage higher reimbursement rates for care outside traditional hours.
• Lower copayments—the percentage of costs parents are expected to cover—for some parents working variable schedules to account for higher cost of care during nontraditional hours.
• Provide targeted funding to providers to offset the additional costs to operate extended hours.³⁰

Establish a grant program focused on extended hours. Expanding care options outside traditional hours would help parents maintain employment and strengthen workforce retention across many high-demand industries. Federal policymakers could establish a grant program to increase extended-hour capacity in regions with large shift-based workforces such as health care, hospitality, and manufacturing. These grants could support:

• Employer initiatives or partnerships working to provide high-quality care off-hours to their employees.³¹
• An expansion of operating hours for existing centers.
• The creation of new extended-hours providers.
• Research into the role of informal care for parents working non-traditional hours to guide future policy and grant initiatives.

5. Minimize the Likelihood of a Child Care Emergency 

For many parents, juggling the demands of work and family can be extremely challenging. Our recent polling found that many parents had to cut back on their work hours or leave jobs altogether due to child care needs.³² To improve balance for parents, policymakers can:

Invest in “back-up care” models. Unexpected disruptions, like illness or school closures, regularly force parents to choose between income and caregiving. Without reliable contingency options, even a temporary disruption can lead to missed work and lost wages. Policymakers could seed “back-up care” networks through employer coalitions, public-private partnerships, or community-based provider systems. Federal support could help:

• Build rapid-response care pools available to parents during disruptions.
• Provide short-term emergency care vouchers to parents for unexpected child care needs.
• Expand the use of employer-sponsored back-up care models beyond large institutions.

6. Make it Easier to Find and Keep Care

One in five families struggle to find child care.³³ Parents face complex search and application processes, time-consuming paperwork, and long waitlists.³⁴ Even when they do find care, parents often face disruptions due to staffing shortages, program closures, and limited flexibility during family emergencies.³⁵ To help families find and keep care, federal policymakers should:

Increase funding for the Child Care Resource & Referral System (CCR&R). CCR&R organizations are one-stop child care support centers for families. They operate both at the state and local levels, providing referrals to local providers, information on financial support, and other critical services.³⁶ Most also receive limited federal funding.³⁷ With a larger federal allocation, these agencies can expand to more cities, hire more staff, and help more families navigate the care search. This could be done through cooperative funding agreements between the CCR&R and federal agencies, modeled after services like Local Technical Assistance Program (LTAP). The nationwide network of LTAP centers, which help localities manage their roadway systems, receives half of its funding from the Federal Highway Administration.³⁸

Implement continuous eligibility for annual child care benefits. An unforeseen event, such as a job loss, may suddenly prevent families from paying for child care. Most providers can’t afford to offer grace periods.³⁹ Revising the Child Care and Development Block Grant (CCDBG) to guarantee families a year of continuous eligibility for child care subsidies, regardless of income changes, could prevent these care disruptions.

Support families when they move. Families may alsoface gaps in care while reapplying for subsidies after moving to a new state. To support these families, policymakers can provide:

• Transfer windows where a family’s old benefits stay active while they are applying for assistance in their new state.
• Expedited benefits for previously-eligible families. For example, DC SNAP applications must be processed in seven days for applicants under a certain income threshold.⁴⁰

Support Child Care Workers

Child care workers are essential to sustaining and expanding supply, yet the workforce continues to shrink. Low pay, limited benefits, and high levels of stress are driving workers out of the sector, forcing providers to close classrooms and disrupting care for families.⁴¹ These challenges make it difficult to recruit and retain staff at the scale needed to meet demand. Strengthening the workforce will require policymakers to expand pathways into the field, improve job quality, and support more stable staffing models.⁴² 

7. Develop Pathways into and Beyond Early Childhood Jobs

The early childhood workforce faces structural barriers to entry and advancement, including limited access to affordable postsecondary education and fragmented professional development systems.⁴³ In order to strengthen the child care workforce, we must expand skills-based entry points and establish clear advancement pathways—without requiring workers to take on unsustainable debt. 

Build a national early childhood apprenticeship system. Congress should expand and standardize early childhood education apprenticeships through the existing federal Registered Apprenticeship system. 

The earn-as-you-learn model of apprenticeships is well-suited to early childhood education, where core competencies—such as mastering safety practices and understanding child development—are best developed in hands-on settings.⁴⁴ A federally supported apprenticeship framework could:

• Define national competency standards aligned with high-quality care benchmarks.
• Provide portable, industry-recognized credentials.
• Leverage existing workforce funding streams.
• Support employers with technical assistance and start-up funding to integrate apprenticeships.
• Create clear career pathways within early childhood and into adjacent education roles.

A standardized but flexible federal framework would increase consistency in training quality while allowing states to adapt to local workforce needs. It would also provide workers with portable credentials that signal competency across employers and regions.

Set a national competency-based licensing requirement. Licensing requirements vary widely across states, creating inconsistent expectations and unnecessary barriers to entry. Establishing competency-based standards would help reduce barriers to entry, improve workforce mobility, and align training with providers’ needs.⁴⁵ A competency-based approach would better align licensing with the skills needed to provide safe, high-quality care by:

• Defining core competencies for key child care roles, including educators, directors, and support staff.
• Developing a national model for competency-based licensing.
• Encouraging states to adopt competency-based pathways that reduce reliance on seat-time or degree requirements.
• Promoting reciprocity across states.

8. Improve Job Quality and Compensation 

Child care staff are severely underpaid. Their national median wage is $13.07 per hour, and around 13% earn less than the federal poverty level.⁴⁶ Child care workers need higher compensation—both to provide for themselves and their families and to allow the US to grow and stabilize its supply of child care workers. Federal lawmakers can help; they should: 

Provide wage supplements to child care workers. States that provide additional payments for child care workers on top of their regular salaries have seen improved earnings and lowered attrition rates in the sector.⁴⁷ In DC, for example, the Early Childhood Pay Equity Fund, which attempts to bring child care worker pay in line with K-12 educators, has led  employees to report higher incomes and longer-term plans to stay in their positions.⁴⁸ However, recent state budget cuts to these programs have shown the importance of prioritizing sustainability and consistency when developing wage supplement initiatives.⁴⁹

Alternatively, federal policymakers can collaborate with state and local governments and private entities to fund these supplements. For example, in North Carolina, the Child Care WAGE$ program combines state and private funds to provide additional pay for early educators.⁵⁰

Fund child care subsidies for child care workers. While child care workers spend all day caring for others’ children, they often can’t afford to pay someone to watch their own.⁵¹ Funding child care subsidies specifically for these workers could reduce their need to take time off or leave their jobs due to family responsibilities, preventing care disruptions.

9. Create Shared Staffing Solutions

With over 14 million kids needing care in the United States and only around 1.1 million child care workers, the latter are stretched extremely thin.⁵² Many burn out and leave their positions, leading to high staff turnover within child care programs.⁵³ To support the remaining workers and reduce future attrition rates, federal policymakers can:

Fund temporary staff sharing programs. Finding qualified temporary caregivers is difficult. Some states, like Ohio, have partnered with local child care centers to hire and train a pool of substitute staff, allowing providers to quickly find short-term coverage without overburdening permanent employees.⁵⁴

Expand an existing AmeriCorps Seniors program. AmeriCorps Seniors facilitates volunteer opportunities for Americans over 55.⁵⁵ Federal policymakers could add child care work to the available volunteer roles, bringing on former teachers and providers. Lawmakers could provide qualified enrollees with a stipend that does not impact their public benefits. Lawmakers can look to existing AmeriCorps Seniors programs for guidance on structure and implementation.⁵⁶ 

Develop evidence-based national standards for training. Many newly hired child care workers must complete extensive training and onboarding before actually working with children.⁵⁷ When new employees’ start dates are delayed, understaffing persists, exacerbating related issues such as care disruptions and worker stress.⁵⁸ By developing an evidence-based national standard for child care training, federal lawmakers can encourage onboarding that is both simplified and effective. To do so, policymakers should: 

• Ask the Government Accountability Office (GAO) to conduct an audit of state training requirements and their impact on caregiving.
• Develop a national training standard. Lawmakers can use the GAO audit to establish a set of evidence-based federal recommendations that encourage states, localities, and providers to simplify training and improve care quality.⁵⁹

Conclusion

Affordable, reliable, and high-quality child care encourages healthy development, allows parents to work or attend school, and boosts businesses and the overall economy.⁶⁰ Access to this critical service should not be a luxury for American families, especially as more than two-thirds of young children in the United States need child care.⁶¹ But parents across the country struggle to find and obtain providers, sacrificing needed income because they can’t find care for their children.

There is strong bipartisan support for federal efforts to improve the child care system.⁶² Federal lawmakers should listen to their constituents and advocate to make care attainable for working families. By making it easier for providers to run their businesses, increasing parental choice, and improving employment conditions for workers, federal policymakers can bring affordable and accessible child care to more American families.