Effects of COVID on the Early Care and Education Market in Chicago

Child care for children younger than school age is a necessary ingredient to support parents' (especially mothers') employment. The child care sector has been dramatically impacted by COVID-19 due to multiple factors including extended closures required by the state, reduced enrollment, and increased costs to adhere to new health and safety standards. There have been efforts to stabilize the child care market at the federal level through grant and loan funding, but relatively few programs have received access to these funds. Recent policy proposals from the Biden administration suggest that more aid for this sector may be coming, but details are scant and we lack the research base to provide strong recommendations on how to best structure aid to the child care sector. Even in normal times, center-based child care can be expensive and often require queuing to obtain a slot. This is especially true for infants and toddlers, for whom safety regulations such as low child-caregiver ratios and requirements for nursey and classroom space to be on the first or second floor of a building can drive up prices. In fact, many child care centers rely on caring for older children (4 year olds), for whom the requirements are less strict and therefore less costly, to cross-subsidize costs for younger children. Chicago, like many other cities and states, is in the process of expanding publicly provided prekindergarten to all 4 year olds. While the impact on children of universal prekindergarten is expected to be positive, removing 4 year olds from the childcare market will further compound challenges in rebuilding the sector. Our project will explore how access to center-based care in Chicago has changed due to COVID and other market-shifting factors, and how access varies across neighborhoods and by demographic groups. We predict that the COVID-19 shock and other underlying factors may substantially reduce the number of center-based child care options available to younger children. It will be important to understand this impact because of the role child care plays in supporting parents' employment. We hope to glean insights into how to better structure supports to this sector. The work proposed here will serve as a pilot study for a more in-depth study of the sector and its impacts on children and families.