Provider Compensation Innovations Study

Compensation and Quality Contracts to Child Care Development Fund (CCDF) Providers: Payment Policies to Improve Equitable Access to High Quality Child Care

Project Overview

This partnership project is motivated by the need for a sound knowledge base to support efforts to improve low-income families’ access to high quality child care that 1) meets parents’ needs, 2) supports child development, 3) is affordable, 4) is attainable with reasonable effort, and 5) is equitable. Our research practice partnership is investigating three policy levers that are critical to improving this multidimensional access: provider payment rate structures, child care grants, and parent co-payment rate structures.

We have developed a research agenda that will produce rigorous, policy-relevant knowledge that supports Illinois’ Office of Early Childhood as they pursue policy reform initiatives related to these three policy levers. Currently, we are in the implementation phase of the project and have begun to execute our research plan.

Project Partnership

This project is a research-practice partnership between: University of Chicago, Illinois Action for Children (IAFC), Illinois Department of Human Services (IDHS) and Center for Early Learning Funding Equity (CELFE)
Additional support from: Consortium of PROSPR Grantees and Research Advisory Committee
Project personnel listed below under Project Collaborators

Funding

Administration for Children and Families (ACF), Promoting Research on Subsidy Payment Rates (PROSPR) grant

Project Components

Research activities for this project are being conducted as part of the ACF-OPRE PROSPR grant. A summary of research activities from Phases I and II of the grant are listed below. Available results and publications are in the following section.

Phase I Planning Grant

Payment Practices Analysis

Analysis of longitudinal data from 2010-2020 considering whether increases in payment rates had measurable positive impacts on child care access, and if so, whether the impacts were equitably distributed.

Copayment Practices Analysis

Analysis of administrative data from 2014 to 2021 considering co-payment rates by family size and income.

ExceleRate / Quality Support Program Pilot Analysis

Qualitative study of Illinois’ Smart Start Quality Supports Program Pilot (fka ExceleRate Pilot), which uses a foundational grants model of funding child care programs.

Phase II Evaluation Grant

Qualitative Study of IDHS Planning Process

Analysis of decision-making process and policy implementation for the State of Illinois’ new Smart Start child care foundational grant programs.

ExceleRate Quality Support Program Pilot Outcome Evaluation

Analysis that builds from Phase I qualitative study of Illinois’ Smart Start Quality Supports Program Pilot (fka ExceleRate Pilot).

Provider Survey and Interviews

Three-wave survey and follow-up interview study of providers expectations about and experiences with Illinois’ new foundational grant programs, including factors that may contribute to program use and non-use.

Assessment of INCCRRA Administrative Data

Assessment of state administrative data regarding the State of Illinois’ new foundational grants (beginning in 2026)

Study Results and Publications

Research Brief

Analysis of payment rates in Illinois, 2010-2020

Summary: We examined longitudinal data from 2010-2020 aiming to determine whether increases in payment rates had measurable positive impacts on child care access, and if so, whether the impacts were equitably distributed by race.

Our analyses indicate a statistically significant correlation between payment rate increases and our two measures of access and affordable access. The coefficients, however, are small, and in the case of access, are negative rather than positive.

We conclude that during times similar to 2011-2019, subsidy payment rate increases will have small negative or only small positive impacts on low-income families’ access to child care. It would likely require very large payment rate increases to move the needle much on improving access to child care using this funding mechanism. Furthermore, given that Illinois requires private payment rates to be set above the state’s subsidy rate, large increases in subsidy payment rates could inhibit access from private pay clients and destabilize the field.

Full research brief coming soon

Memo of Findings

Illinois CCAP Co-Payment Changes from 2014 to 2021 by Family Size and Family Income

Summary: We conducted a descriptive analysis of co-payment rates from 2014 to 2021 by family size and income based on administrative data that reports co-payment rates by family size and poverty level each fiscal year.

Our analysis highlights how co-payment rate changes reflect rule changes that occurred during particular administrations and found little differential effect of changes by family size; however, we did find that the copayment rate changes affect families differently depending on income.

Full Co-payment Memo

Research Brief

An Implementation Evaluation of a Pilot Intervention to Enhance Salaries and Improve Quality in Rural Child Care Centers

Summary: We studied the implementation of Illinois’ ExceleRate Contract Pilot which was designed to tie contract funding to investments in workforce and quality. This contract model is a “vouchers plus” approach to supporting child care providers who serve the child care and early education needs of low-income families. It recognizes that a demand-side approach alone can contribute to volatility in provider revenue, making it difficult for providers to plan their work and make sustainable investments in quality programming and their workforce. The state implemented the ExceleRate pilot in 35 rural child care centers and homes whose clientele included at least 40% subsidized families.

We conducted interviews with center directors and owners participating in the ExceleRate Contract pilot. Our interviews showed that center directors received the program well overall, especially the salary enhancements and the coaching components. However, there were mixed views about whether salary enhancements directly translated into higher quality programming. We also found that at the state and regional levels, there was excitement and commitment to this funding approach, indicating a strong level of buy-in. Finally, our analysis highlighted some challenges to implementation, which centered on administrative burdens related to insufficient IT infrastructure, insufficient level of TA support, and staff time constraints.

Draft Executive Summary