Growing evidence of how Earned Income Tax Credits can help benefit children

By Alan Richard

Interest has grown in the presidential race and on Capitol Hill over possible expansions of Earned Income Tax Credits (EITCs). ICS recently convened an expert panel in Washington to discuss how leaders might weigh EITCs’ impact on young children and their families.

At the federal level, the EITC is a refundable tax credit for families who work, “fading out” as family income increases. EITCs are drawing interest from across the political spectrum for their potential to make an even greater difference in low-income families’ lives than some more expensive programs, said Bryan Boroughs, ICS’s director of legislative affairs, in introducing the ICS panel discussion, held Aug. 25 at the University Club just blocks from the White House.

Panelists commented on ICS’s in-depth 2015 report, The Effects of the Earned Income Tax Credit on Child Achievement and Long-Term Educational Attainment, by former Michigan State University researcher Michelle Maxfield.

In fact, a whole flourish of new research is showing the benefits of EITCs and other income-related supports on children’s long-term success, said panelist Chye-Ching Huang, senior tax analyst at the Center on Budget and Policy Priorities in Washington. One study shows low-income families’ use of food stamps during the prenatal year led to better high school graduation rates—18 percentage points, she said.

Children on Medicaid do better in school, are more likely to graduate from high school on time, and have higher school attendance than children from similar-income families that don’t use Medicaid, Huang said.

“We’re seeing these remarkable long-term changes in children’s outcomes and success,” Huang said. She recommended several key tax-policy priorities for states, including starting state EITCs to invest in children and families. Twenty-six states and the District of Columbia now have tax credits that build on federal EITCs.

 

eitc-map-brookings

States adopt and adapt the EITC to address local need, Brookings Institution.

Expanding EITCs may actually give government “more bang for your buck” than other popular early-childhood programs, including pre-K, argued Richard V. Reeves, co-director of the Brookings Institution’s Center on Children and Families. But expanding EITCs may not be easy.

Underlying the bipartisan support for expansions of EITCs, political leaders differ on how to go about paying for the tax credits and the purpose of doing so, Reeves said. President Obama favors raising taxes on wealthy Americans to pay for expanding EITCs, while Speaker of the House Paul Ryan favors cutting spending on other programs that help the poor, he said.

No matter how leaders proceed with the debate, Reeves recommends several issues to consider: First, policymakers set a specific goal for expanding EITCs—perhaps raising student achievement or improving child outcomes. “What is it we’re trying to do with the dollar here?” he asked, noting that outcomes may be over the long term, such as high school and college success rates.

Reeves urged that whatever measures are used to determine the impact of increased EITCs on families, they be based research, “or evidence-based policymaking,” not “policy-based evidence making.”

In his view, there are four possible ways to tackle race- and wealth-based education gaps in the U.S.: money (through EITCs or the minimum wage, etc.), services (pre-K, etc.), time (parental leave, etc.), and in parenting/family skills (nurse home visiting, etc). Different families benefit from more of one of these approaches than others, and policy should reflect that need. He added that he’s interested in home visiting programs to help families with early education, parenting and health care (ICS is helping expand such programs, including a $30 million expansion of the Nurse Family Partnership across rural areas of South Carolina).

Leaders should look specifically at child-care tax credits, said Angela Rachidi, a research fellow in policy studies at the American Enterprise Institute. These can be received as part of refunds during tax-filing season, she said.

A single mother with two children must earn $16,300 a year above minimum wage to earn even a modest tax credit, and people under age 25 don’t qualify for the credit at all. This happens even though one important study shows that children in lowest-income families can benefit the most in their achievement when families receive such tax breaks, she said.

“Right now, the very poorest children are left out,” said Rachidi, who lives in New York and served as deputy commissioner of the city’s Department of Social Services under Mayor Michael Bloomberg.

Expanding EITCs for childless workers also is gaining attention. House Speaker Ryan has proposed expanding those credits to benefit roughly 1.5 million noncustodial parents, young adults who may become parents, grandparents or guardians, and to reduce toxic stress on young adults and their families. Some low-income Americans must help support their parents, siblings or play a role in raising children in their families, she noted.

Rachidi urged policymakers to carefully weigh the potentially more substantial impacts of expanded EITCs versus other policies designed to help low-income families—even including a minimum wage hike, class-size limits and pre-K programs.

The ICS-Maxfield study adds to “a really large and increasing body of literature that shows EITC does have positive benefits to children,” she said. “EITC has much more positive benefits for children than these other policies.”

More research is needed on how families receiving EITCs and their communities or states may see benefits in other ways, including the impact on whether to seek employment. But challenges stand in the way of expanding EITCs, she said.

Some federal lawmakers question the high level of improper payments families receive—not from fraud but a lack of tighter controls that other programs such as TANF already have. Solutions to that issue have been studied by AEI and could include rules changes on how families are structured and children are claimed on tax forms. National chain tax preparers usually know how to do it correctly, but smaller providers or individuals may not, she said.

Such credits also can encourage couples not to marry, which may not be wise overall public policy, she added. Another factor: expanding tax credits can be extremely expensive, perhaps costing $8 billion a year.

 

Alan Richard is a veteran national education writer, formerly of Education Week, the Southern Regional Education Board and others. He contributes to the Hechinger Report and is the board chairman of the nonprofit Rural School and Community Trust. Follow him on Twitter: @educationalan.

 

Findings from Pay for Success Feasibility Studies

With support from the Social Innovation Fund, the Institute for Child Success (ICS) has worked extensively with jurisdictions across the U.S. to explore the suitability of Pay For Success (PFS) financing as a means of improving child outcomes by expanding evidence-based early childhood interventions. We selected four jurisdictions through a competitive process and began our work with them in April 2015. We are pleased to release our feasibility study findings and supporting materials here, and summarize the results of our analyses below. We hope cities, counties and states interested in PFS financing, early childhood service providers, researchers and policymakers, funders and impact investors will benefit from the experience and analyses of these four places.

Diverse Children

Photo courtesy of the US Department of Agriculture’s Flickr Stream. Used under Creative Commons License.

Jurisdictions ranged from a small southern city to two states on different ends of the country, and no two programs looked the same. We have found multiple types of early childhood interventions feasible for PFS financing: child abuse prevention, preschool, and home visiting. What they did have in common were strong public/private partnerships; a driving dedication to improving life for families and children; and a willingness to think outside the box.

Connecticut

ICS partnered with the Department of Children and Families (DCF), the Office of Early Childhood (OEC), and the Department of Social Services (DSS) in addition to two local foundations to explore the feasibility of expanding Triple P, a parenting education and support program, using PFS financing. Triple P uses a public health approach and is the only preventive intervention shown through rigorous evaluation to improve child welfare outcomes at a county level. We found that it would be feasible to reduce child maltreatment and out-of-home placements for whole Connecticut communities by implementing Triple P with PFS financing.

Sonoma County, California

ICS found PFS to be a feasible way improve outcomes for Sonoma County’s children and communities through high-quality preschool. Feasible outcomes include: third grade reading and math scores; kindergarten readiness; and possibly reduced special education. Sonoma could feasibly serve 3,600 children over 5 years by utilizing PFS funding.

Sonoma County also explored an expansion of the Nurse-Family Partnership home-visiting program. Although NFP is well suited to PFS financing (demonstrated by its Pay for Success project in South Carolina) we found that PFS is not a feasible way to finance an expansion of NFP in Sonoma County, because the baselines for preterm birth, emergency room visits and other PFS outcomes were already quite good; NFP researchers felt that, given the county’s relatively small population, the program could not make enough of an impact on those already-low baselines to justify a PFS project.

Spartanburg, South Carolina

ICS partnered with the City Manager’s Office and the Mary Black Foundation to explore the feasibility of expanding early care and education programs through PFS financing. We found the implementation of a continuum of services for young children that promotes healthy families feasible using a modified Pay for Success structure; the continuum includes:

  • Home Visiting (BirthMatters, Family Connects, Nurse-Family Partnership)
  • Parent Education & Support (Triple P, Text4Baby, ReadyRosie)
  • Early Learning (Early Learning Centers supported by Quality Counts)

While traditional PFS is difficult to implement in small communities, Spartanburg could feasibly implement this continuum of services over a 5-year period, with the potential to serve 4,000 families at all income levels.

Washington State

In partnership with Third Sector Capital Partners, ICS worked with Washington’s Department of Early Learning and Thrive Washington to explore PFS financing as a tool for expanding a suite of five home visiting programs in the state’s Home Visiting Services Account (HVSA) – Parents as Teachers, Parent-Child Home Program, Family Spirit, Nurse-Family Partnership, and Early Head Start Home-Based. ICS led the intervention-outcome analysis and found that all but one of the programs (Early Head Start Home-Based) yielded outcomes that are suitable for PFS contracts. We assessed the readiness of 45 service providers using four home visiting program models across 25 counties. While NFP is the only program that currently has the capacity to expand under PFS (or other outcome-based contracting), the other three home visiting models are interested in outcome-based funding and could build the capacity to do so within a reasonable timeframe. The feasibility study found that a significant investment in time and resources is required for the HVSA to move forward with a PFS project.

 

Conclusions

The feasibility study process in these jurisdictions was eye-opening not only to the teams on the ground but also for the ICS Pay for Success team, and we seek to share these lessons through our ongoing work in the field. We were privileged to work with leaders in local communities who were envisioning non-traditional ways to invest in families and children, for the betterment of individuals and families. We continue to view Pay for Success not as a trendy financing strategy, but as a valuable tool to diversify early childhood funding and bring the sector into an outcomes-based framework committed to what works.

We encourage you to view the feasibility studies; to explore the templates we have created with SIF support to help jurisdictions begin exploring feasibility on their own; and to join our mailing list, where we will soon announce our next feasibility study competition!

The ICS Pay for Success Team

Is a Pay for Success Feasibility Study Right for You?

In August, the U.S. Department of Education announced $2.8 million in available funding for a Preschool Pay For Success (PFS) Feasibility Pilot program. These grants will fund feasibility studies for early education Pay for Success projects. State, local, and tribal governments are eligible to apply, with letters of intent due by September 12 and applications due by October 6.

The Institute for Child Success is thrilled by this new opportunity to explore financing for high-quality preschool programs.  As a grantee of the Social Innovation Fund, we have worked in partnership with jurisdictions across the country to conduct several feasibility studies on using PFS to expand preschool, home-visiting, and child welfare programs; we will be releasing the results of our first group of studies the week of September 12. ICS also conducted the feasibility study that led to the South Carolina Nurse-Family Partnership Pay for Success Project, announced earlier this year. pfs-steps

But what is a Pay for Success feasibility study, and why should you consider whether the Department of Education opportunity is right for your jurisdiction? A feasibility study is exactly that – a formal exploration of whether the PFS method of financing may be a good fit for your jurisdiction to fund an expansion of its existing preschool program. It is not a commitment to pursue PFS financing.

ICS uses a multi-step process to explore feasibility (more details are available in this memo). Those steps include:

  • Assessing your preschool program and determining what outcomes it achieves
  • Assessing the capacity of preschool service providers to serve more children
  • Developing a viable expansion plan and determining how much it will cost
  • Projecting the impact of the expansion on outcomes in your community
  • Conducting a cost-benefit analysis
  • Determining feasible PFS contract terms and financing structures

You can get a preview of the process by exploring the templates we have released as part of our Social Innovation Fund work.

The study culminates in a recommendation about whether PFS is a good fit at this time. While feasibility studies are a crucial starting point for a PFS transaction, they can also be useful even if the eventual recommendation does not support a PFS transaction. The process of conducting the study provides information about the outcomes of a specific program, assesses data needs, and considers the costs, benefits and practicalities of expanding the program. This information can help a jurisdiction assess its needs and map the future. If the goals of this project align with your current needs and interests, learn more and consider an application.

ICS welcomes the opportunity to discuss our experience in assisting governments exploring PFS to improve outcomes for young children with you and we are open to exploring partnerships with eligible entities interested in applying.
To discuss opportunities further please contact Megan Golden or Joe Waters.

Event: The Effects of the Earned Income Tax Credit on Child Achievement and Long-Term Educational Attainment

Please join the Institute for Child Success for a briefing entitled “The Effects of the Earned Income Tax Credit on Child Achievement and Long-Term Educational Attainment.”

The briefing will highlight recent research that examines the relationship between academic outcomes for young children and receipt of an enhanced Earned Income Tax Credit (EITC).  An outstanding panel will follow, discussing opportunities for the use of tax and fiscal policy, including the EITC, to improve outcomes for young children and their families.

Panelists will include:

  • Chye-Ching HuangSenior Tax Analyst with the Center on Budget and Policy Priorities’ Federal Fiscal Policy Team
  • Angela RachidiResearch Fellow in Poverty Studies at the American Enterprise Institute
  • Richard V. ReevesCo-Director of Brookings’ Center on Children and Families

EITCFor quick reference:
Institute for Child Success briefing:
The Effects of the Earned Income Tax Credit on Child Achievement and Long-Term Educational Attainment
Thursday, August 25, 2016, 10:00 AM ET
The University Club
1135 16th Street NW, Washington, DC 20036

Space is limited, and seating can only be guaranteed for those who RSVP.  RSVPs can be submitted by email to Emily Grubb. We hope that you will find the briefing informative and useful to your work.  Please feel free to contact us with any questions or concerns in advance of the briefing.

Newsletter: New board members selected, Recapping the Social Impact Performance Advisors Conference, Research Symposium registration now open, and more from ICS

ICS Header
      In This Newsletter, August 2016::
BoardICS Selects New Board Members
The Board of Directors of the Institute for Child Success has elected four new members of its Board of Directors. The new directors are:
Annette Ricchiazzi of Pasadena, California
Gary Glickman of Washington, D.C.
Chris Story of Spartanburg, South Carolina
Hassan Brown of Oakland, California
To read more about our fantastic new board members, please visit the ICS blog
ECRS Early Childhood Research Symposium 
Registration is now open for the Fourth Annual Institute for Child Success Early Childhood Research Symposium, which will be held October 13-14 in Charlotte, North Carolina and is hosted in partnership with the University of North Carolina, Charlotte, College of Education. The Symposium will feature keynote addresses from Dr. Ronald Ferguson (Harvard University) and Dr. Marion Broome (Duke University) along with a Plenary Keynote Panel titled, “Place Matters for Children and Families: Understanding the Influence of Environments and Systems in Which Children Grow Up.”
Speakers were recently chosen for the three concurrent session tracks: Physical and Mental Health, Early Learning, and Communities, Systems, and the BuiltEnvironment. Those selected to present included researchers from LAUP, New America Foundation, Nurse-Family Partnership, and Clemson University. Extra congratulations to Dr. Mariel Kyger from LAUP for her submission, “High-Quality Preschool Improves Academic Outcomes at Kindergarten: A Regression Discontinuity Approach.” Dr. Kyger has been selected as the recipient of the inaugural ICS Early Career Research Award.
Furthermore, we are excited to honor Dr. Celia Ayala, CEO of LAUP, and the Kate B. Reynolds Charitable Trust with the 2016 ICS Champions for Children Awards. These awards honor outstanding achievement in promoting the success and well-being of all young children. All awards will be presented during the Research Symposium opening reception on October 13th.
Spaces are limited and going fast, so click here to register for the Symposium! We look forward to seeing you in Charlotte!
PFSCONFRecapping the Social Impact Performance Advisors Conference
In June, the Institute for Child Success, ReadyNation, and the Sorenson Impact Center hosted the Third Annual Conference of the Early Childhood Social Impact Performance Advisors in Denver. The event convened nearly 300 advocates, policymakers, researchers, and funders to discuss trends and developments in using Pay for Success to expand early childhood opportunities, and chart a path forward. ICS Executive Vice President Joe Waters has discussed the conference in the context of opportunities in the Pay for Success field in a new blog with our colleagues at America Forward.
The timing of the conference was opportune – the same week, the House of Representatives passed a landmark PFS bill that would provide more than $100 million in support for such programs, with $50 million designated for early childhood (learn more). This enthusiasm at the federal level was reflected in the opening comments from Dave Wilkinson, Director of the White House Office of Social Innovation and Civic Participation, who noted the opportunities PFS provides for innovation: “We know if we don’t try anything new, we won’t improve,” he said. “The responsible choice is to try promising concepts on a small scale and roll them out gradually if they work.” You can read more about his comments, and day one, on thisblog.
 Dave Wilkinson of the White House Office for Social Innovation.
Day 2 kicked off with a high-level discussion of recent PFS projects in the early childhood space and a frank discussion of the challenges and opportunities in constructing such projects as well as a conversation about the perspectives of funders in existing PFS projects. The rest of the day offered the opportunity for in-depth breakout sessions on a range of issues, including the Evaluation and Research Track supported by the Laura and John Arnold Foundation. More reflections are available on our blog from day two.
 
Navjeet Bal (Social Finance), Christian Soura (S.C. Department of Health and Human Services), Roxane White (Nurse-Family Partnership) and Emily Gustafsson-Wright (Brookings Institution).
The final day of the conference featured additional breakout sessions on PFS in early childhood, as well as rallying farewell remarks from Colorado State Senator Mike Johnston. Sen. Johnston is an advocate for PFS in the state of Colorado, and also understands that the importance of early childhood programs goes well beyond dollars and cents. More details on the final day are available in this concluding blog.
While the conference is ICS’s flagship Pay for Success event each year, we encourage interested parties to learn more all year round!
The conference Resource Document contains links to recommended reading from our conference presenters. It’s a great guide for those who attended the conference as well as those looking for a primer on specific issues in early childhood Pay for Success. See what others were talking about during the conference on the hashtag #sif4ec. You can learn more about the technical assistance we provide, supported by the Social Innovation Fund, get up to date on all PFS projects in the U.S., and accesstemplates to use in your own PFS planning.
The Institute for Child Success team wrapping up the Third Annual conference!
GRANTS

New Grants Bolster ICS Impact

ICS work is made possible by the generous support of individuals, foundations, corporations, and organizations that share our vision:  to ensure the success of all young children.  For a complete listing of recent supporters, please see the 2015 Annual Report.
Recently, ICS has been awarded the following grants:
The Corporation for National and Community Service (CNCS) has awarded ICS a third-year of funding through the Social Innovation Fund.  This additional support will allow ICS to assist additional jurisdictions across the United States in exploring the Pay For Success (PFS) financing mechanism.
The Pritzker Children’s Initiative provided funding to support the Third Annual Conference of the Early Childhood Social Impact Performance Advisors held in Denver in June.
The Laura & John Arnold Foundation awarded ICS grant support to promote rigorous evaluations of Pay for Success (PFS) projects and to sponsor the evaluation track at the Third Annual Conference of the Early Childhood Social Impact Performance Advisors.
The Duke Endowment will provide continued support for ICS’s policy research work.  This support will ensure that ICS continues to develop research-based proposals for realizing best outcomes for young children and their families throughout the Carolinas.
The Sorenson Impact Center served as co-host, together with ICS and ReadyNation, of the Third Annual Conference of the Early Childhood Social Impact Performance Advisors and provided technical and financial support.
The Sisters of Charity Foundation of South Carolina is supporting ICS’s ongoingEarned Income Tax Credit (EITC) research to establish the foundations for a more just and effective tax policy for South Carolina’s children.
The Frances P. Bunnelle Foundation awarded ICS a grant to support ongoing research and policy work in South Carolina and Georgetown County.
The Priester Foundation provided ICS with a generous grant to support ongoing operations and organizational capacity building.
The BlueCross BlueShield of South Carolina Foundation is supporting ICS through a grant to complete a statewide study on the current protective services of child advocacy centers (CACs) in order to produce research and policy recommendations focused on eliminating toxic stress.*
* About the BlueCross BlueShield of South Carolina Foundation
Headquartered in Columbia, the foundation is an independent licensee of the Blue Cross and Blue Shield Association. Its mission is to promote and support healthier South Carolinians, particularly the economically vulnerable, by supporting solutions to address gaps in health care and serving as an agent of change to support innovation and value-added public-private partnerships.
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In case you missed it…
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For more in-depth coverage on what’s new and noteworthy, check out our blog!

Institute for Child Success welcomes new Directors

The Board of Directors of the Institute for Child Success, a research and policy organization working to create a culture that facilitates and fosters the success of all children, has elected four new members of its Board of Directors. The new directors are:

Annette Ricchiazzi of Pasadena, California

Gary Glickman of Washington, D.C.

Chris Story of Spartanburg, South Carolina

Hassan Brown of Oakland, California

cropped-cropped-ics-small-logo1.jpgLinda Brees, Chair of the Institute’s Board of Directors said: “These incredible leaders bring a wealth of expertise and enthusiasm for improving the lives of our youngest children. They know the importance of affording all children the strongest possible start in life to ensure that they are prepared for school and for life. We are thrilled that they have decided to join our board and we look forward to working with them in the years to come.”

Annette Ricchiazzi is the Director of Institutional Advancement for The Pasadena Playhouse, the State Theater of California, and the second oldest professional regional theater in the country.  She is also currently a project consultant on the Pomona Unified School District Pay for Success Project working on behalf of the district and partners to secure funding and investments for a high-quality preschool build-out in Pomona.  She has close to 20 years of experience in the nonprofit sector focused on development, communications, strategic planning, special events and corporate, government, community and alumni relations.  Most recently she was the Director of Advancement and Strategic Partnerships at LAUP, a large early education nonprofit service provider, policy and advocacy organization in Los Angeles. Annette spent several years at the University of Southern California (USC) managing alumni relations, major gifts, annual fund, special projects, publication production and editorial, speech writing, and university protocols. She followed up her time at USC with over a decade of private consulting in the nonprofit arena specifically with higher-ed clients such as USC, UCLA, Cal Tech and Stanford University. She received a Fine Arts degree from the University of Southern California and spent the beginning of her career as an actress on the New York and regional stages.

Gary Glickman is a Managing Director at Accenture based in Washington, DC. Prior to joining Accenture in 2014, Gary was a Senior Policy Advisor in the Office of Domestic Finance, U.S. Department of Treasury and Coordinator of the Partnership Fund for Program Integrity Innovation in the Office of Management and Budget within the Executive Office of the President. Gary has over 30 years of experience in helping government and private sector organizations meet their objectives. He is a recognized leader in the fields of human services, electronic banking and the application of technology to government. He has written and spoken extensively on the subjects of social impact bonds, integration of human services, electronic benefits transfer, biometrics, smart cards and identity management. He is a successful entrepreneur and business leader as well as government innovator.

Chris Story is the Assistant City Manager of the City of Spartanburg, South Carolina. In that role, Chris is responsible for Planning, Economic Development, and Finance within the city and has supported the revitalization of Spartanburg’s historic downtown and a variety of neighborhoods around Spartanburg. He has also taken the lead in making investing in young children a city priority both through the development of a Pay for Success project to fund an early childhood continuum serving all young children within the city limits and through his leadership with Spartanburg’s Way to Wellville and the Spartanburg Academic Movement. A native of Spartanburg, Chris is a graduate of Wofford College (B.A. Economics).

Hassan Brown is the Community School Manager in the Oakland Unified School District and the Managing Director of the East Bay Asian Youth Center. He previously served in roles at the Oakland Public Education Fund and the Bill and Melinda Gates Foundation. A former teacher with the New York City Department of Education, Hassan was a New York City Teaching Fellow and a Child Protective Specialist in the Administration for Children’s Services in New York City’s government. He earned a B.A. in Psychology from Morehouse College and a Master of Science in Education from Hunter College, City University of New York. He also completed coursework in the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill.

About ICS

Headquartered in Greenville, South Carolina, the Institute for Child Success (ICS) is an independent, nonpartisan, nonprofit research and policy organization dedicated to the success of all young children. For more information, visit www.instituteforchildsuccess.org.

Thinking Outside the Box on the Crisis of Early Educator Wages

By Megan Carolan, Associate Director for Policy Research

Early childhood educators and child care providers face low wages that hurt the future of the early childhood field, according to a new report from the Center for the Study of Child Care Employment at Berkeley. This report is the latest to paint a stark portrait of the everyday lives of early educators and the difficulties which will prevent early childhood from reaching its full potential. According to the new report,

“Early educators are among the lowest-paid workers in the country. The median hourly wages for child care workers range from $8.72 in Mississippi to $12.24 in New York. Nationwide, the median wage is $9.77. Preschool teachers fare somewhat better: wages range from $10.54 in Idaho to $19.21 in Louisiana. In contrast, the median national wage for kindergarten teachers is $24.83.

Nearly one-half of child care workers (46 percent), compared to 26 percent of the U.S. workforce, are part of families that participate in at least one public assistance program, such as Medicaid or food stamps.”

Consider that again: nearly half of child care workers participate in a public assistance program to make ends meet within their own families. We know that living below, or close to, the poverty level is stressful for families and can contribute to conditions that can make childrearing difficult, from working long hours to food insecurity to frequently moving. Yet, the workforce to which millions of American trust their children is expected to push these stressors to the back burner. This is particularly jarring in an early childhood system that prioritizes public investment for low-income families – children’s caregivers both at home and in their child care settings may be facing the same stressors.

We don’t have to guess about the impact these conditions have on early childhood professionals – research tells us. Stress and adversity can impact teachers’ physical and mental health, which can negatively impact their interactions with the children in their care, according to a 2014 report from CSCCE. Children who are not provided with appropriate support and sensitivity in the classroom have been observed to have higher stress hormones as well as anxiety. Low wages and job stability are clear sources of stress for child care providers – a study in California found that 57 percent of teaching staff were “somewhat or strongly worried” about economic insecurity, based on a 13 item index. Teachers who earned less than $12.50 per hour had significantly higher scores on this index. One study has noted that higher Environment Rating Scale scores – one of the most commonly used measures of classroom quality nationwide — in the classroom were correlated with lower aggregate worry scores. Or, as one early educator interviewed for The New York Times, eloquently remembered “meeting with a senator who told her, ‘You don’t get into this for the money; you’re paid in love.’ ‘Really?’ she replied. ‘When my landlord comes, can I just give him a hug?’”

Photo used under Creative Commons license. Flickr user Sarah Joy.

Photo used under Creative Commons license. Flickr user Sarah Joy.

Fixing this egregious wage disparity is complex and expensive, but the time is now. As we reported last year, a recent survey by the National Association for the Education of Young Children (NAYEYC) found that voters rank the importance of the work done by early educators alongside that of firefighters and nurses. When voters were asked essentially whether educator requirements should be increased before pay improves, or if salaries should be improved to attract teachers with higher credentials, voters were nearly equally split. According to CSCCE,

“Only 17 states have policies or programs in place to address the problem of low wages for early educators, and they still fall severely short:

  • Twelve states offer a stipend program to supplement wages, and two states (Louisiana and Nebraska) offer early educators refundable tax credits that augment earnings, but these do not fundamentally raise ongoing salaries of early educators. Furthermore, eligibility requirements and funding levels limit participation and constrain supplement amounts.

  • While 23 states require a minimum of a bachelor’s degree for public pre-K and elementary school teachers, only four states (Hawaii, Missouri, Oklahoma, and Tennessee) require the same starting salary and salary schedule for all public pre-K teachers as for K-3 teachers.”

The importance of pay equity is very clear in our technical assistance work with jurisdictions exploring Pay for Success. In both our first and second cohorts, ICS staff have met with child care and pre-K providers in jurisdictions that are looking to expand early childhood programs to understand not only local conditions but also the barriers to expanding. Often, providers are excited about the opportunity to provide more high-quality slots for children, but dubious that they can meet the staffing needs given difficulty they have in offering competitive salaries and benefits. We often hear this concern from community-based providers, who feel that qualified teachers are likely to take pre-K classrooms in public schools instead, where they are paid on public school salaries and access the same time off as K-12 teachers.

We know that fidelity of implementation is essential to a Pay for Success project demonstrating its anticipated outcomes, and this includes ensuring that providers are well-support. To that end, ICS explores possible strategies to address wage disparities in the jurisdictions we work with. Often, it’s feasible only to start with the type of small step policies the CSCCE acknowledges are beneficial, but not sufficient. In Spartanburg, South Carolina, for example, where we have helped develop a continuum of support for children from birth to age 5, we included pricing to implement the WAGE$ model – this model provides small wage stipends, twice per year, to early childhood teachers based on experience and continuing education. Evidence suggests the program has achieved its goal of reducing turnover, with a rate of 12% to 18% turnover statewide (compared to the 25% goal set by SmartStart for the program, and a national rate of 30%-40%). WAGE$ recipients also demonstrate progress on their education, and reported a 99% satisfaction rate with the program. Such efforts, of course, are not enough to secure economic stability for this wage force, but mark an important step forward in making sure teachers’ needs are at the table. Early childhood teachers provide tremendous value to our students and their values, as well as to our economies – we cannot afford to ignore their compensation.