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Untapped potential? How states contract directly with providers to shore up child care choices

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Child care and early education series, policy brief no.1
Schumacher, Rachel; Irish, Kate and Greenberg, Mark
Publication Date: 
1 Apr 2003

Available in print for order (see SOURCE) and online for download.


This policy brief offers a brief history of federal child care policy and a discussion of why voucher-only systems may not meet the needs of low-income families. Then it describes the results of the CLASP (Center for Law And Social Policy) survey and makes recommendations for federal and state policymakers.

Over the 1990s, states used federal and state dollars to expand child care assistance for low-income families. Nevertheless, persistent gaps in child care supply continue in many communities, and supply problems are often reported for particular populations, such as infants and toddlers, children with special needs, school-age children, and families needing care during non-traditional hours. In addition, state expansion of child care funding has slowed recently, and most states now face major fiscal crises, which will put additional pressure on state child care spending.

These gaps in child care supply have come amidst an ongoing discussion about how to finance child care assistance for low-income families. Much of the debate has centered on how vouchers for parents and contracts with providers each affect the supply of child care and the opportunities parents have to exercise choice from that supply.

In the first-in-depth national study of contracting policies, CLASP interviewed child care state administrators in most of the 24 states that reported use of contracts for child care assistance to us in 2002.

Although nearly half the states use contracts to shore up child care supply for low-income families, the full potential of contracting directly with providers has not yet been tapped, according to a survey by CLASP. States can use contracts to increase the supply of child care in certain high need areas, to provide child care to special populations, and to improve the quality of child care program standards and enhance services.