New Evidence About Child Care in Canada Use Patterns, Affordability and Quality

IRPP Investing in Our Children choicesVol. 14, no. 12, October 2008 ISSN 0711-0677 www.irpp.org New Evidence about Child Care in Canada Use Patterns, Affordability and Quality Gordon Cleveland, Barry Forer, Douglas Hyatt, Christa Japel and Michael Krashinsky Gordon Cleveland is senior lecturer in economics at the Department of Management, University of Toronto Scarborough. Since the 1980s, he has researched, written and published on a wide ounded in 1972, the Institute for Research on range of economic and policy issues related to Public Policy is an independent, national, early childhood education and care. nonprofit organization. F Barry Forer is a Ph.D. candidate in measurement, IRPP seeks to improve public policy in Canada by evaluation and research methodology at the University of British Columbia. Since 1988, he generating research, providing insight and sparking has been working as a child care consultant debate that will contribute to the public policy specializing in quantitative analysis. decision-making process and strengthen the quality of the public policy decisions made by Canadian Douglas Hyatt is a professor of business economics at the Joseph L. Rotman School of Management, governments, citizens, institutions and organizations. University of Toronto. He has over 20 years of research experience in child care and related issues. IRPP's independence is assured by an endowment fund established in the early 1970s. Christa Japel is a professor in the Faculty of Education, Department of Special Education and Training, at the Université du Québec à Montréal. She is also a member of the team leading the Quebec Longitudinal Study of Child Development ondé en 1972, l’Institut de recherche en (QLSCD). politiques publiques (IRPP) est un organisme Michael Krashinsky is a professor of economics F canadien, indépendant et sans but lucratif. at the University of Toronto and chair of the Department of Management at the University of L’IRPP cherche à améliorer les politiques publiques Toronto, Scarborough. He has written five books canadiennes en encourageant la recherche, en mettant and numerous articles about child care policy. de l’avant de nouvelles perspectives et en suscitant des * * * * * débats qui contribueront au processus décisionnel en matière de politiques publiques et qui rehausseront la This publication was produced under the qualité des décisions que prennent les gouvernements, direction of Sarah Fortin, Research Director, IRPP. les citoyens, les institutions et les organismes The manuscript was copy-edited by Jane Broderick, proofreading was by Zofia Laubitz, canadiens. production was by Chantal Létourneau, art direction was by Schumacher Design and L’indépendance de l’IRPP est assurée par un fonds de printing was by AGL Graphiques. dotation établi au début des années 1970. Copyright belongs to IRPP. To order or request permission to reprint, contact: IRPP 1470 Peel Street, Suite 200 Montreal, Quebec H3A 1T1 Telephone: 514-985-2461 Fax: 514-985-2559 E-mail: [email protected] All IRPP Choices and IRPP Policy Matters are available for download at www.irpp.org To cite this document: Cleveland, Gordon, Barry Forer, Douglas Hyatt, Christa Japel, and Michael Krashinsky. 2008. “New Evidence about Child Care in Canada: Use The opinions expressed in this paper are those of the authors and Patterns, Affordability and Quality.” IRPP do not necessarily reflect the views of IRPP or its Board of Directors. Choices 14 (12). Investing in our Children/Investir dans nos enfants Research Director / Directrice de recherche Sarah Fortin his research program examines issues related to family policy from the perspective of lifetime T investment in human capital based on in-depth empirical and analytical evidence of the strengths and weaknesses of current policies as well as evidence supporting alternative strategies. The IRPP's research in this area focuses on recent developments across the country in policies that are geared toward children. e programme de recherche examine les politiques publiques familiales selon une pers- C pective d'investissement à long terme dans le capital humain et sur la base d'études empiriques et analytiques des forces et faiblesses de nos politiques actuelles, et explore des stratégies de rechange. Il met l'accent sur les récents choix des gouvernements fédéral et provinciaux en matière de politiques des- tinées à l'enfance. Acknowledgements Contents 2 Introduction: Policy Options and History e would like to thank the two anonymous referees, and most especially Sarah Fortin 5 Use Patterns in Nonparental and Parental Child Care W of the IRPP, for working with us to improve exposition of the ideas in this paper. 15 Spending Patterns in Child Care: The Issue of Affordability 22 Quality in Nonparental Child Care 27 Conclusions and Policy Directions 31 Appendix A: Misinterpretations of Child Care Data from the NLSCY 35 Notes 38 References New Evidence about Child Care in Canada Use Patterns, Affordability and Quality Gordon Cleveland, Barry Forer, Douglas Hyatt, Christa Japel and Michael Krashinsky Introduction: Policy Options and History n the last 25 years in Canada, there has been an explosion1 of policy interest in nonparental child I care.2 There are many reasons for this intense public interest. From the recommendations of the Royal Commission on the Status of Women, through Judge Rosalie Abella’s Royal Commission on Equality in Employment, many Canadians have expressed a need for child care policies that promote gender equi- ty in workforce access. The rapid increase in the workforce participation of mothers over the last 40 years and more has produced high levels of demand for all types of child care and has led to persistent shortages of licensed child care services. Beyond workforce and gender issues, there has been increasing recognition that good-quality early childhood education and care (ECEC) services can have beneficial effects on child development. This opinion has been buttressed by much-discussed longitudinal research findings on the effects of early education on children, by emerging research on the influence of environments on brain development in young children, and by economic findings that investment in the early years can pay larger lifetime dividends than many training- or education-related alternatives. Despite all of this public interest, the Canadian-gen- erated knowledge base on child care has been modest. Surprisingly, for instance, Canada has no statistical surveys dedicated to collecting information on the use patterns, prices and expenditures, costs, and quality of child care. Our information on child care comes from surveys designed for other purposes but containing a few questions on child care, or from one-off surveys by academics or advocacy organizations, or from 2 IRPP Choices, Vol. 14, no. 12, October 2008 IRPP Choices, Vol. A Glimpse Ahead Box 1 We will show that the use of nonparental care by fami- Terminology lies with preschool children is now commonplace, rather than unusual. A large majority of Canadian children In this paper, we use the term child care very broadly to receive nonparental care regularly, just as a large majori- include all types of parental or nonparental care, ty of Canadian mothers of young children are employed including kindergarten. Inclusion of school-based either full-time or part-time over the course of the year. kindergarten services in the term “child care” is unusu- Our research finds that the number of children using al, but we argue in the paper that these services are nonparental child care is much greater than estimated in often close substitutes, and should be considered the recent literature. Further, close to half of all pre- together. We frequently distinguish between non- school children of employed mothers in Canada primari- parental and parental types of child care, and between ly attend ECEC services (i.e., regulated types of care). regulated and unregulated types of nonparental child Our results suggest that families cannot afford the care. Regulated types of child care include licensed high costs of good-quality nonparental child care. centre-based child care services, regulated family home Average annual child care spending by employed fami- child care (provided by an unrelated person in their lies is about $4,500, which is a burden for these fami- own home), nursery schools, prekindergartens and lies but still not enough to cover good-quality kindergartens. Nonparental child care includes regulat- regulated services unless the cost is subsidized. Some ed types of care and all unregulated types of care families are able to provide all their own child care (by except care provided by a parent (e.g., care by a rela- off-shifting between the two parents or by having the tive, neighbourhood sitter or in-home caregiver). In mother work at home). However, for most families this this paper, early childhood education and care (ECEC) is is too costly, in terms of lost income, to be a viable a synonym for regulated child care (i.e., including option. The mother’s earning power appears to be a kindergartens). The main focus of this paper, because of major constraint on the amount that families are will- data availability, is the types of care used by families in ing to spend on child care. Those families who pur- which the mother is employed or studying. chase child care currently spend, on average, over 20 percent of the mother’s earnings on these services. administrative data collected by municipal, provincial Since the purchase of child care makes these earnings or territorial governments. possible, apparently the mother’s earnings potential The team of academics who worked on this paper limits the amount that families are willing to spend. has unearthed new evidence from these surveys: about The most important finding, given the widespread what types of family uses what types of child care, use of nonparental care, is that the quality of child care New Evidence about Child Care in Canada, by Gordon Cleveland et al.

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