Child Care Market Rate/Cost of Quality Studies

Description

For more than three decades, researchers at The University of Texas at Austin have helped Texas build one of the nation’s most sustained bodies of evidence on the price and cost of child care. Conducted annually for the Texas Workforce Commission, the Texas Child Care Market Rate Study provides the detailed market information used to understand child care prices across Texas and inform subsidy reimbursement policy. Its findings also serve as a source for broader policy research examining child care affordability and family economic self-sufficiency.

The work is conducted jointly by the Ray Marshall Center at the LBJ School of Public Affairs and the Texas Institute for Child & Family Wellbeing at the Steve Hicks School of Social Work. The Texas Institute leads provider data collection, while the Ray Marshall Center leads the study’s statistical analysis, estimation, and reporting.

Texas’ sophisticated market-rate research system combines probability-based provider data collection with administrative rate records, regional estimation, nonresponse analysis, and statistical adjustments—approaches increasingly used by leading state child care research systems nationally.

The study’s value comes not simply from conducting surveys, but from a continually refined research design built to measure a large, diverse, and changing child care market accurately.

• Combines multiple sources of child care market information. Since 2018, researchers have estimated market rates using both directly collected provider data and Texas Workforce Commission administrative records on published rates. Combining these complementary sources substantially increases the number of Texas providers represented in the study and improves the precision of market-rate estimates.
• Draws on rate information from a large share of Texas providers. Recent studies have incorporated rate information from approximately 48 to 61 percent of licensed and registered child care providers statewide, combining administrative records with rates obtained directly from providers.
• Produces estimates for every region of Texas. The study is designed to generate reliable estimates not only for Texas as a whole but for each of the state’s 28 Local Workforce Development Areas, allowing policymakers and workforce boards to understand substantial geographic differences in child care markets.
• Uses a carefully designed probability-sampling strategy. Researchers construct statewide and regional samples from the population of licensed and registered providers, account for differences among provider types and geographic areas, increase sampling where participation has historically been lower, and survey entire populations when the number of providers in a geographic or provider category is too small for conventional sampling.
• Uses administrative data strategically to reduce provider burden and strengthen coverage. Because TWC already maintains published rate information for providers participating in the subsidy system, the sampling design can place greater emphasis on providers whose market prices cannot otherwise be observed rather than unnecessarily collecting information that is already available.
• Examines and adjusts for potential nonresponse bias. Researchers routinely use statistical analysis to determine whether providers who participate in the survey differ systematically from those who do not. Where differences are identified, statistical weights are developed to improve the representativeness of the resulting market-rate estimates.
• Weights the market rather than treating every observed price identically. The study’s estimation procedures take account of provider characteristics, child care capacity, geography, provider type, and the contribution of administrative records so that reported percentiles more accurately represent the child care opportunities available to Texas families.
• Collects information from people knowledgeable about provider pricing. Interviewers seek the person most familiar with each provider’s tuition and fee structure and schedule callbacks when that person is not immediately available. Data collection can accommodate early-morning, evening, and weekend schedules when necessary.
• Reduces burden for organizations operating multiple child care locations. Multi-site providers are identified in advance so that a knowledgeable contact can efficiently provide information for multiple facilities in a coordinated interaction, an approach the research team has used for more than a decade.
• Uses established data-quality procedures throughout collection and analysis. Research staff are trained in survey protocols and data collection procedures, and researchers review the resulting data for inconsistencies, unusual observations, and potential errors before producing market-rate estimates.
• Continually evaluates new ways of reaching providers. The research team regularly assesses participation patterns and has tested or plans to test additional outreach and data-collection strategies, including email, expanded follow-up in areas with lower response, stakeholder outreach, text-based approaches, and other online and mobile options as technology and provider preferences evolve.
• Provides unusually detailed information about the child care market. Findings can be examined by geography, provider type, child age, schedule of care, and market-rate percentile, providing TWC and local workforce boards with considerably more information than a single statewide average price.
• Directly supports decisions about families’ access to child care. TWC and Texas’ Local Workforce Development Boards use Market Rate Study findings to assess subsidy reimbursement rates and the extent to which families receiving child care assistance can access providers in the broader child care market. The results also inform state budget and policy discussions about the changing price of care.
• Pairs market-price research with analysis of what quality child care actually costs to provide. The companion Child Care Cost of Quality Study examines the additional resources associated with higher-quality care, including staffing, compensation, education and training, curriculum, assessment, and other structural quality factors. Together, the two studies help distinguish what families are charged for child care from what it costs providers to deliver quality care.
• Builds on more than three decades of methodological development. University of Texas researchers have worked with the Texas Workforce Commission on child care market-rate research since 1991. Over that period, the study has evolved as administrative data, technology, federal requirements, the Texas child care system, and research methods have changed.

Together, the Texas Child Care Market Rate Study and Cost of Quality Study provide Texas with a rigorous, longitudinal evidence base for understanding the price, availability, and cost of delivering child care—while also contributing Texas data to broader research on child care affordability, family economic security, and public policy.

Associated Projects

Texas Child Care Market Rate Survey  (April 2003 – August 2022)
Child Care Cost of Quality Modeling Study  (May 2019 – April 2022)