The effects of universal state pre-kindergarten on the child care sector: The case of Florida's voluntary pre-kindergarten program

Highlights

• Florida is a national leader with respect to state preschool access for 4-year-olds.

• Florida's preschool program (VPK) increased child care availability by 13%.

• VPK increased preschool participation by 4-year-olds.

• The program led to drops in preschool participation among 3-year-olds.

Abstract

Over the past two decades states have drastically increased their investments in pre-kindergarten programs. One major question about state investments in early childhood education programs is to what extent these initiatives create new child care options rather than crowd-out existing private child care options. We investigate this issue using Florida's universal pre-kindergarten program (VPK), a national leader with respect to preschool access, as a case study. Leveraging a 9-year panel of data we find that the introduction of Florida's VPK program expanded the size of the state's licensed child care market by 13% relative to the predicted market size. Using a synthetic control difference-in-difference approach we also show that VPK led to an increase in the percentage of 4-year-olds enrolled in formal care but a drop in the percentage of 3-year-olds enrolled in these settings. Implications are discussed.

Introduction

Over the past decade states have increased their investments in pre-kindergarten programs substantially. Since 2002, the percentage of 4-year-olds enrolled in state-funded preschool programs has doubled (Barnett, Carolan, Squires, Clarke Brown, & Horowitz, 2015). In eight states and Washington, D.C. more than 50% of 4-year-olds are enrolled in state-funded preschool programs, and other states are scaling up towards similar “universal” initiatives (Barnett et al., 2015).

The primary goal of these public preschool initiatives is to ensure that all children have access to high quality early childhood opportunities. A large existing body of research demonstrates that participation in preschool can have meaningful impacts on a host of short- and long-term outcomes. However, in order for large-scale, early childhood initiatives to yield meaningful benefits, they must provide access to more intensive or higher quality programs than children would have experienced in their absence. Therefore, one important unanswered question about state investments in early childhood education programs is to what extent these initiatives supplant or expand existing child care options.

Critics of universal preschool argue that these programs use public resources to subsidize care for middle income families who are already using private sector care. Advocates, on the other hand, suggest that state pre-kindergarten initiatives provide slots and services for children who otherwise would not have access to high quality programs.

Our study adds to a limited body of research about “preschool crowd-out” by investigating how Florida's universal pre-kindergarten program impacted the child care sector. In 2005, Florida introduced Voluntary Pre-Kindergarten (VPK), a free preschool initiative open to all 4-year-olds. The implementation of the VPK program represents the most rapid expansion of state preschool in the United States. In its first year, VPK served nearly half of Florida's 4-year-olds. Today, the program serves roughly 75% of 4-year-olds, and is among the largest public preschool programs nationwide.

The paper explores two primary questions. First, to what extent did the introduction and expansion of universal preschool in Florida lead to changes in the size of the early childhood sector (including both formal classroom-based arrangements such as child care centers, pre-kindergarten, and Head Start programs as well as informal arrangements such as family day care homes)? Second, did universal preschool lead to changes in the services provided by the child care sector? Specifically, is there evidence of a market shift towards serving VPK-eligible children (e.g., 4-year-olds) and away from serving VPK-ineligible children (e.g., 3-year-olds)?

Leveraging data from the Florida Department of Children and Families (DCF), we analyze a unique nine-year panel (2003-2011) of county-level data on the capacity of all child care facilities in the state, including both formal and informal settings. We combine these data with county-level information on VPK expansion from its inception in 2005 through 2011. We exploit the within-county variation in the expansion of the VPK program to estimate the impacts of public preschool on the size of the overall child care sector. Our results indicate that Florida's VPK program led to a 13.3% increase in slots in Florida's licensed child care market relative to the predicted market size in the absence of VPK.

Further, using national data from the Current Population Survey (CPS) and a synthetic control difference-in-difference framework we show that VPK increased the percentage of 4-year-olds enrolled in formal care arrangements. Notably, however, VPK led to a drop in the percentage of 3-year-olds enrolled in school, suggesting potential unintended consequences of the expansion.