Massachusetts Child Care Cost Models: Report on 2024 Cost Research and Cost Model Updates
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| Title: | Massachusetts Child Care Cost Models: Report on 2024 Cost Research and Cost Model Updates |
|---|---|
| Language: | English |
| Authors: | Amanda Danks, Maya Escueta, Isaac Kaplan, Austin Gragson, David Loeb, Ashley Darang, American Institutes for Research (AIR) |
| Source: | American Institutes for Research. 2025. |
| Availability: | American Institutes for Research. 1400 Crystal Drive 10th Floor, Arlington, VA 22202. Tel: 202-403-5000; Fax: 202-403-5001; e-mail: inquiry@air.org; Web site: https://www.air.org/ |
| Peer Reviewed: | N |
| Page Count: | 52 |
| Publication Date: | 2025 |
| Document Type: | Reports - Research |
| Education Level: | Early Childhood Education |
| Descriptors: | Early Childhood Education, Child Care, Costs, Family Income, Models, State Aid, Educational Finance, Financial Support, Child Care Centers, Compensation (Remuneration), Professional Personnel |
| Geographic Terms: | Massachusetts |
| Abstract: | Historically, states' child care subsidy programs have used market rates, or tuition charged by providers, to set subsidy rates that support income-eligible families in accessing child care services. However, the market rate is often based on what families in a specific community can afford to pay, not necessarily what it actually costs to provide early education and child care services. The result is constrained resources for basic operational expenses including educator and staff compensation and an unsustainable business structure. Recent guidance from the federal Office of Child Care gives states the opportunity to apply for permission to use an alternative model to set child care subsidy rates. It encourages states to consider using cost-based information to inform subsidy rates. Massachusetts was committed to this approach and subsequently approved by the federal Office of Child Care in early 2024 to use an alternative model (i.e., a cost model) to set Child Care Financial Assistance (CCFA) reimbursement rates. The Massachusetts child care cost models are designed to estimate the value of the resources used to provide early education and child care across the Commonwealth. The models must be updated periodically to represent the most current information, including resources used and resource prices. The Massachusetts Department of Early Education and Care (EEC) contracted with the American Institutes for Research® (AIR®) to update its child care cost models in two phases. Phase 1 (completed September 2024) uses the 2022 cost models as a base, makes a comprehensive update to the models based on 2024 prices, and is intended to support near-term CCFA rate changes in fiscal year 2025 using the cost methodology pre-approved by the federal Office of Child Care. Phase 2 (to be completed by June 2025) will further refine and expand the model to support EEC and other stakeholders in making policy, program, and funding decisions in the future. This report describes the updates made to the cost models in Phase 1 along with the associated recommendations and next steps. A key component of this research is the refinement of models that represent the cost of care as it stands currently and models that represent the cost of an aspirational (or ideal or higher-quality) level of care. This work seeks to understand what resources are needed to provide an aspirational level of care, including staff (e.g., different child-to-staff ratios or staff qualifications needed for additional services), professional learning opportunities, materials and equipment, and other necessary resources. AIR refined three cost models for Phase 1, which include (a) the cost of current care (centers), (b) the cost of aspirational care (centers), and (c) the cost of care in family child care programs (FCCs). The cost of current care (center) model represents the typical value of all the resources currently used to provide child care in centers in Massachusetts. The cost of aspirational care (center) model represents the value of all the resources that would be needed to provide an aspirational (or ideal) level of child care in centers. A key difference between the cost of current care and cost of aspirational care center-based models is staff compensation, with a higher salary and additional benefits (i.e., an increase in health insurance and the addition of retirement benefits) included in the cost of aspirational care model. The FCC model is a hybrid that includes the value of all the non-personnel resources used currently to provide care in FCCs across Massachusetts and uses the region-specific center director salary as the salary for the FCC owner/operator. This report summarizes the Phase 1 updates to the 2022 models and details the per-child cost estimates by age, region, and setting for the 2024 cost of current care model (centers only), 2024 cost of aspirational care model (centers only), and 2024 FCC model. This report also summarizes key differences between 2022 and 2024 cost estimates and differences between 2024 cost estimates and fiscal year 2024 (FY24) CCFA rates. This report also provides an overview of the methodology used to make the updates and refinements and recommendations for CCFA rate adjustments based on these analyses, along with the next steps for future work. |
| Abstractor: | ERIC |
| Entry Date: | 2025 |
| Accession Number: | ED674321 |
| Database: | ERIC |
| FullText | Text: Availability: 0 CustomLinks: – Url: https://eric.ed.gov/contentdelivery/servlet/ERICServlet?accno=ED674321 Name: ERIC Full Text Category: fullText Text: Full Text from ERIC |
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| Items | – Name: Title Label: Title Group: Ti Data: Massachusetts Child Care Cost Models: Report on 2024 Cost Research and Cost Model Updates – Name: Language Label: Language Group: Lang Data: English – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Amanda+Danks%22">Amanda Danks</searchLink><br /><searchLink fieldCode="AR" term="%22Maya+Escueta%22">Maya Escueta</searchLink><br /><searchLink fieldCode="AR" term="%22Isaac+Kaplan%22">Isaac Kaplan</searchLink><br /><searchLink fieldCode="AR" term="%22Austin+Gragson%22">Austin Gragson</searchLink><br /><searchLink fieldCode="AR" term="%22David+Loeb%22">David Loeb</searchLink><br /><searchLink fieldCode="AR" term="%22Ashley+Darang%22">Ashley Darang</searchLink><br /><searchLink fieldCode="AR" term="%22American+Institutes+for+Research+%28AIR%29%22">American Institutes for Research (AIR)</searchLink> – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="SO" term="%22American+Institutes+for+Research%22"><i>American Institutes for Research</i></searchLink>. 2025. – Name: Avail Label: Availability Group: Avail Data: American Institutes for Research. 1400 Crystal Drive 10th Floor, Arlington, VA 22202. Tel: 202-403-5000; Fax: 202-403-5001; e-mail: inquiry@air.org; Web site: https://www.air.org/ – Name: PeerReviewed Label: Peer Reviewed Group: SrcInfo Data: N – Name: Pages Label: Page Count Group: Src Data: 52 – Name: DatePubCY Label: Publication Date Group: Date Data: 2025 – Name: TypeDocument Label: Document Type Group: TypDoc Data: Reports - Research – Name: Audience Label: Education Level Group: Audnce Data: <searchLink fieldCode="EL" term="%22Early+Childhood+Education%22">Early Childhood Education</searchLink> – Name: Subject Label: Descriptors Group: Su Data: <searchLink fieldCode="DE" term="%22Early+Childhood+Education%22">Early Childhood Education</searchLink><br /><searchLink fieldCode="DE" term="%22Child+Care%22">Child Care</searchLink><br /><searchLink fieldCode="DE" term="%22Costs%22">Costs</searchLink><br /><searchLink fieldCode="DE" term="%22Family+Income%22">Family Income</searchLink><br /><searchLink fieldCode="DE" term="%22Models%22">Models</searchLink><br /><searchLink fieldCode="DE" term="%22State+Aid%22">State Aid</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Finance%22">Educational Finance</searchLink><br /><searchLink fieldCode="DE" term="%22Financial+Support%22">Financial Support</searchLink><br /><searchLink fieldCode="DE" term="%22Child+Care+Centers%22">Child Care Centers</searchLink><br /><searchLink fieldCode="DE" term="%22Compensation+%28Remuneration%29%22">Compensation (Remuneration)</searchLink><br /><searchLink fieldCode="DE" term="%22Professional+Personnel%22">Professional Personnel</searchLink> – Name: Subject Label: Geographic Terms Group: Su Data: <searchLink fieldCode="DE" term="%22Massachusetts%22">Massachusetts</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: Historically, states' child care subsidy programs have used market rates, or tuition charged by providers, to set subsidy rates that support income-eligible families in accessing child care services. However, the market rate is often based on what families in a specific community can afford to pay, not necessarily what it actually costs to provide early education and child care services. The result is constrained resources for basic operational expenses including educator and staff compensation and an unsustainable business structure. Recent guidance from the federal Office of Child Care gives states the opportunity to apply for permission to use an alternative model to set child care subsidy rates. It encourages states to consider using cost-based information to inform subsidy rates. Massachusetts was committed to this approach and subsequently approved by the federal Office of Child Care in early 2024 to use an alternative model (i.e., a cost model) to set Child Care Financial Assistance (CCFA) reimbursement rates. The Massachusetts child care cost models are designed to estimate the value of the resources used to provide early education and child care across the Commonwealth. The models must be updated periodically to represent the most current information, including resources used and resource prices. The Massachusetts Department of Early Education and Care (EEC) contracted with the American Institutes for Research® (AIR®) to update its child care cost models in two phases. Phase 1 (completed September 2024) uses the 2022 cost models as a base, makes a comprehensive update to the models based on 2024 prices, and is intended to support near-term CCFA rate changes in fiscal year 2025 using the cost methodology pre-approved by the federal Office of Child Care. Phase 2 (to be completed by June 2025) will further refine and expand the model to support EEC and other stakeholders in making policy, program, and funding decisions in the future. This report describes the updates made to the cost models in Phase 1 along with the associated recommendations and next steps. A key component of this research is the refinement of models that represent the cost of care as it stands currently and models that represent the cost of an aspirational (or ideal or higher-quality) level of care. This work seeks to understand what resources are needed to provide an aspirational level of care, including staff (e.g., different child-to-staff ratios or staff qualifications needed for additional services), professional learning opportunities, materials and equipment, and other necessary resources. AIR refined three cost models for Phase 1, which include (a) the cost of current care (centers), (b) the cost of aspirational care (centers), and (c) the cost of care in family child care programs (FCCs). The cost of current care (center) model represents the typical value of all the resources currently used to provide child care in centers in Massachusetts. The cost of aspirational care (center) model represents the value of all the resources that would be needed to provide an aspirational (or ideal) level of child care in centers. A key difference between the cost of current care and cost of aspirational care center-based models is staff compensation, with a higher salary and additional benefits (i.e., an increase in health insurance and the addition of retirement benefits) included in the cost of aspirational care model. The FCC model is a hybrid that includes the value of all the non-personnel resources used currently to provide care in FCCs across Massachusetts and uses the region-specific center director salary as the salary for the FCC owner/operator. This report summarizes the Phase 1 updates to the 2022 models and details the per-child cost estimates by age, region, and setting for the 2024 cost of current care model (centers only), 2024 cost of aspirational care model (centers only), and 2024 FCC model. This report also summarizes key differences between 2022 and 2024 cost estimates and differences between 2024 cost estimates and fiscal year 2024 (FY24) CCFA rates. This report also provides an overview of the methodology used to make the updates and refinements and recommendations for CCFA rate adjustments based on these analyses, along with the next steps for future work. – Name: AbstractInfo Label: Abstractor Group: Ab Data: ERIC – Name: DateEntry Label: Entry Date Group: Date Data: 2025 – Name: AN Label: Accession Number Group: ID Data: ED674321 |
| PLink | https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=eric&AN=ED674321 |
| RecordInfo | BibRecord: BibEntity: Languages: – Text: English PhysicalDescription: Pagination: PageCount: 52 Subjects: – SubjectFull: Early Childhood Education Type: general – SubjectFull: Child Care Type: general – SubjectFull: Costs Type: general – SubjectFull: Family Income Type: general – SubjectFull: Models Type: general – SubjectFull: State Aid Type: general – SubjectFull: Educational Finance Type: general – SubjectFull: Financial Support Type: general – SubjectFull: Child Care Centers Type: general – SubjectFull: Compensation (Remuneration) Type: general – SubjectFull: Professional Personnel Type: general – SubjectFull: Massachusetts Type: general Titles: – TitleFull: Massachusetts Child Care Cost Models: Report on 2024 Cost Research and Cost Model Updates Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: American Institutes for Research (AIR) – PersonEntity: Name: NameFull: Amanda Danks – PersonEntity: Name: NameFull: Maya Escueta – PersonEntity: Name: NameFull: Isaac Kaplan – PersonEntity: Name: NameFull: Austin Gragson – PersonEntity: Name: NameFull: David Loeb – PersonEntity: Name: NameFull: Ashley Darang IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 03 Type: published Y: 2025 Titles: – TitleFull: American Institutes for Research Type: main |
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