Provider Responses to Government Stabilization of the Child Care Industry

Background and Purpose: The Covid-19 pandemic represented a severe economic shock to the childcare industry. Many programs closed during the first months of the pandemic. Those who remained open or reopened after closure experienced severe enrollment declines and reductions in revenue, while at the same time operational costs increased because of new public health requirements. The federal government and individual states created new streams of relief for childcare programs and also relaxed program eligibility, simplified application, and increased payment generosity. This childcare stabilization effort continues, with $39 billion in dedicated childcare industry relief in the 2021 American Rescue Plan (Uhing, 2020).

We consider how childcare centers and licensed family childcare homes in Illinois experienced government relief efforts in the pandemic’s first year. We examine provider knowledge, views, and experiences with three programs: the Child Care Attendance Waiver, which paid subsidized providers although children were not in attendance; the Child Care Restoration Grant, which financially supported programs with reduced enrollment, and the federal Paycheck Protection Program (PPP), which was a forgivable loan providing up to 2.5 times monthly payroll. Our conceptual framework is informed by research on prior government responses to natural disasters and recessions, especially well-known challenges coordinating relief efforts across levels of government in a federalist system (e.g., Gordon, Huberfeld & Jones, 2020; Kapucu & Hu, 2022). We also draw from the policy implementation literature, especially studies of government trust and administrative burden (e.g., Houston & Harding, 2014; Lipsky, 1980).

Methods: We conducted (through Zoom) 76 qualitative interviews with center directors and licensed family childcare owners purposively sampled by region, size, and dependency on public funding. Interviews were transcribed and coded using a priori and emergent analytic categories. Through an iterative comparison process, patterns within and across interviews were identified and unit-by-code matrices were constructed to aid interpretation.

Findings: The majority of programs received some assistance and many used multiple programs. Relief was critical to remaining open or reopening, although providers reported financial vulnerability even with assistance. The reasons for not using assistance included uncertainty about eligibility, ethical and fairness concerns, and administrative burden. Concerns about multiple program interactions led some providers to avoid a program out of concern it would make them ineligible for another program or because they feared they were breaking rules. Access to Illinois programs was described as relatively easy (minimal paperwork, simplified eligibility), although some providers expressed challenges and frustrations. Providers were less knowledgeable and trusting of the federal PPP, describing the application process as confusing, unfair and burdensome.

Conclusion and Implications: In addition to providing valuable information to policymakers about childcare stabilization efforts, this study contributes provider voice to literature on bureaucratic encounters and administrative burden. There exists research on how administrative practices are experienced by parents and street level bureaucrats who administer childcare subsidies (e.g., Adams, Snyder, and Sandfort, 2002; Barnes and Henly, 2018), but few studies investigate these questions from a provider viewpoint. Given the central role of providers in this field, we contribute to filling this important gap.