The supply of licensed child care is inadequate in general to meet the demand for affordable care in the US, and is even rarer for babies and toddlers&emdash;particularly in low-income communities. Babies and toddlers in lower-income and immigrant families are more likely to be in unlicensed care than those in higher-income or U.S.-born citizen families. One reason licensed infant and toddler care is difficult to find is because it is more expensive for providers to offer than care for older children. Licensed care for babies and toddlers is unaffordable for many parents.
State policies, in particular child care subsidy policies, can help to build the supply and improve the quality of available care for this vulnerable population. One way states are doing this activity is by contracting directly with child care providers for high quality infant and toddler care. Contracts guarantee a number of infant/toddler child care spaces with a particular provider and, importantly, may require and support higher quality standards beyond basic health and safety provisions of state licensing regulations, thereby increasing the supply and quality of available care.
This paper explores the potential of contracts to address issues of supply and quality in the provision of infant and toddler child care. CLASP interviewed policymakers in five states to understand why and how they use contracts in their state child care subsidy programs for infant and toddler care. CLASP also interviewed representatives of contracted providers. Their thoughts on whether and how contracts could be used to increase quality or supply of infant and toddler child care were discussed, as well as implementation challenges and their suggestions for policy changes that would improve the contracts approach. This paper presents the findings of these discussions and offers guidance for other states considering using contracts in this way.