Understanding Child Care Demand and Supply Issues

Reports abound on the shortage of quality childcare options for California families. Rising rates of employment among mothers with young children, initiatives to boost youngsters’ school readiness, and government’s recent push to move single mothers from welfare to work continue to spur family demand for organized childcare and preschool programs.

New funding is moving down to county governments; California’s support for childcare expansion has quadrupled since 1996, rising to over $3 billion annually. In addition, parents spend billions in subsidies and private pay fees at centers, licensed family childcare homes, or for paid caregivers.

Still, with family demand for childcare outpacing supply, state and local policymakers want to learn how best to target resources on those neighborhoods most in need. So how can local planners determine where childcare supply is falling short of family demand? How can this fresh funding be allocated across neighborhoods to correct the unequal distribution of supply? These tandem questions are being tackled by Los Angeles County officials through research efforts intended to inform local policy actions. Using the findings from two recent studies in Los Angeles County, one conducted by PACE and the other by the county childcare planning committee, this policy brief provides an overview of some of the options facing policymakers as they address these issues.