Board of Early Education & Care

DRAFT Board of Early Education & Care Subcommittee on Research & Communications April 7, 2011

As the Massachusetts Board of Early Education and Care prepares to visit Rate Reform, the Subcommittee on Research and Communications, in consultation with the Subcommittee on Fiscal and Policy, generated a series of questions to help inform the work of the Fiscal and Policy Committee and the Board. This memorandum outlines research projects which would help to answer these questions.

The Rate Reform questions were submitted to Kenley Branscome, a consultant to EEC who is conducting the 2010 Market Price Survey. He provided responses based on prior research and the present status of the Market Price Survey, recommended some of potential research projects described below. See memorandum Response to Questions on EEC Rate Reform, March 2011. The questions were also shared with the New England and Islands Regional Education Laboratory (NEI-REL), based at the Education Development Center and funded by the U.S. Department of Education. If Congress acts to continue funding the NEI-REL, they have committed to undertake requested research projects beginning in May 2011.

The list of potential research projects below is delineated for discussion purposes and is not exhaustive.

RATE REFORM QUESTIONS AND POTENTIAL RESEARCH PROJECTS

(1) What is the most effective way to set rates as measured against the goal of ensuring access to high quality early education and care? At least 50% of median market rate? At least 75% of market rate? Based on labor costs affiliated with high quality teaching? Based on what programs have made work in various markets?

Potential Research Projects: (a) New information being generated by the 2011 Market Survey, combined with the data tool being developed by EEC in collaboration with University of Massachusetts at Lowell, will enable a more nuanced picture of local markets for early education and care and enable us to target localized problems. For example, we could identify communities in which access is likely a challenge by comparing market rates by zip code with median family income and availability of subsidies; we could locate communities in which the prevailing market rate is most likely too low to support high quality services to children and families by looking at the Market Price Survey data compared to prevailing wage data and other metrics.

1 (b) Cost modeling to reflect the importance of highly competent and properly compensated staff and to better understand the role of financial incentives at each level of QRIS. (c) Review the approaches used by other states linking program reimbursement rates to QRIS, including rates, add-ons, direct program and provider incentives, and other supports. (d) Review literature related to the impact of financial incentives on teachers and early educators.

(2) For the purposes of conducting a market rate survey, how do you define the market?

Potential Research Projects: (a) Using information collected through the 2010 Market Price Survey and zip code level data, EEC may be able to consider alternatives to the six geographic regions presently used to define the relevant early education and care market(s). At present, 17 states define CCDF reimbursement rates using geographic regions and 11 states rely on county boundaries.1

(3) How do you treat localities in which EEC is the majority purchaser of child care and thus depresses market rates?

Potential Research Projects: (a) Use the analysis suggested at 1(a) to identify communities located in markets where the market price is likely too low to support high quality and the research recommended at 1(c) to identify existing options to address this gap.

(4) What is the relevant comparative labor pool for early educators? How much should a BA credentialed teacher make?

Potential Research Projects: (a) Compile information on BA wages in various sectors across all labor market regions in Massachusetts, including wages of BA teachers in public elementary schools, wages of BA credentialed individuals in the education sector, and wages of BA holders in general. (b) Consult experts to identify the most appropriate comparative labor pool and the rationale for selection. (c) Review research on teacher pay and financial incentives in K-12 and early education sectors to help identify the right magnitude and target of compensation.

1 National Child Care Information and Technical Assistance Center, Administration of Children and Families, U.S. Department of Health and Human Services Quick Facts: A Market-based System: Setting Child Care Payment Rate Policies, Updated November 2010. http://nccic.acf.hhs.gov/poptopics/fact_care_payment_rate.html

2 (5) If the state is expected to purchase high quality ECE for children, what are current wages relative to the average wage of a BA holder in each market region? What rates would be necessary to enable programs to match the average BA-wage for at least one teacher per classroom?

Potential Research Projects: (a) Analyze wage information provided in the Professional Qualifications Database. (b) Ensure the provider survey to be conducted by the Wellesley Center for Research on Women includes collection of wage- and benefits-related data. (c) Use the analysis of other states’ approaches recommended at 1(c) to inform a multi-pronged approach to teacher wages, including but not limited to rates. (d) Develop a cost model to estimate the rate required to support different quality objectives in different parts of the state. Consider comparing these rates to existing prices to create an affordability index. (e) Since most early educators are working towards credentials linked to high quality early education and care along a continuum, review other states’ link between rates, incentives, pay, and a career lattice.

(6) How do these projected rates compare as a percentage of the median household income in families with children under the age of 6 residing in the market region?

See project identified at 1(a).

(7) What activities should be included in rates? Alternatively, what proportion of rates is driven by labor costs?

Potential Research Projects: (a) Obtain a breakdown of all components of Massachusetts’ rates and add ons, as well as estimated expenditures on each. (b) Review the research on the estimated proportion of program cost tied to labor.

(8) What are different rate configurations and which is the best fit for MA? Should it be a tiered system like Pennsylvania? A half date rate? A full day rate? An hourly rate? An add on rate?

See project identified at 1(c). Look in depth at policy choices including length of service, units for reimbursement, add ons, basis for tiered rates, and magnitude of tiered rates. Analyze approaches individually and in combination to make recommendations reflective of the Massachusetts context.

3 (9) How do rates and access work in MD? NJ? NC? where state funds supplement federal funds.

Potential Research Projects: (a) Review how selected states use state funds to serve children and families.

(10) How should we prioritize access to early education? What does the research tell us about prioritizing populations of children?

Potential Research Projects: (a) Since the factors associated with children and families who are most at-risk are well-known, and relied upon in Massachusetts, a literature review of varied perspectives and rationales regarding how to prioritize populations served could help to inform the Board’s decisionmaking.

(11) What percentages of children in various age cohorts and income strata are served by federal and state funds in other states? Where does MA fit?

Potential Research Projects: (a) Review and analyze Child Care Development Fund summary reports from the National Child Care Information Center. See also the project identified at 9(a).