Introduction

An increasing number of young children regularly attend early care and education (ECE), defined as formal and informal nonparental care for children from birth to age 5 who are not yet in kindergarten (Morrissey 2019). ECE is particularly important for single-parent and two-parent households in which parents or other caregivers are employed or attend school. These families often require some type of ECE, such as center-based care; family child care; or family, friend, and neighbor care while family members work or study. For families with low income, access to regular ECE is critical to helping parents work and achieve financial security (Adams et al. 2006). Families with low and middle incomes have lower rates of participation in ECE and experience gaps in affordability, including an inequitable cost burden within the current ECE system (NASEM et al. 2018). Subsidized ECE stems from a variety of federal, state, and local funding sources listed in Exhibit 1. This system is not sufficient to serve all families that face financial barriers: in 2018, only 15 percent of all children eligible under federal rules and 23 percent of all children eligible under state rules received subsidized child care (Chien 2021). Head Start served less than 7 percent of eligible 3- and 4-year-olds in 2020–2021 (Friedman-Krauss et al. 2021).