Regulation and Retention of Family, Friend, and Neighbor Care in the Illinois Child Care Subsidy Program

Background. Policy reforms to improve quality in license-exempt family child care (FFN) have received significant policy attention since the 2014 Child Care and Development Block Grant (CCDBG) Reauthorization. One approach has been to encourage provider training as a condition of subsidy program participation. In February 2017, Illinois' child care subsidy program announced that FFN providers must complete health and safety training (of 16-21 hours) by October 2017 in order to be paid. Descriptive analyses of the state administrative data show that the number of subsidized FFN providers fell by 3,884 (23 percent) within one year. Based on this finding, we use quasi-experimental design to examine whether the health and safety training requirement reduced the number of FFN providers in the Illinois subsidy program.

Methods. To explore the impact of the announced policy change, we analyzed monthly subsidy administrative data on provider by type of care from January 2016 to April 2019 under an agreement with the state. Impacts of other major policy changes before January 2016 and after April 2019 limited the period we could select to analyze. We identified a pre-intervention period (January 2016 – February 2017), a seven-month policy phase-in period (March - September 2017), and a post-intervention period (October 2017 – April 2019). We applied interrupted times series (ITS) analysis to the times series of the monthly FFN providers participating in the subsidy and a comparison group of licensed family child care home (FCC) providers.

A quasi-experimental approach, ITS estimates the level and trend of an intervention group (FFN providers) both pre- and post-policy intervention to draw causal inferences about the policy’s impact. Incorporating a comparison group – FCC providers who were not affected by the regulations -- allowed us to control for confounding factors in our estimate of the February 2017 policy announcement’s impact on the number of subsidized FFN providers. We conducted standard diagnostic tests and sensitivity tests.

Results. Estimates derived from both segmented regression models with a control group and times series models in R yielded similar results: Between the February 2017 announcement of health and safety training requirements and the October 2017 effective date, the number of subsidized FFN providers fell about 19 percent, and the cumulative decline was 25 to 28 percent six months later. When we analyzed the number of children in FFN and FCC care over the same period, the results were similar.

Implications. The state health and safety policy regulations created the unintended consequences of reducing the number of subsidized FFN providers. CCDBG emphasizes parental choice, but results suggest that many parents lost their chosen child care arrangement under the new policy. Some FFN providers may still be providing care to families outside of the subsidy system and without subsidy program oversight. If we want to maximize parental choice and enhance the care parents receive in FFN homes, we might experiment with lighter-touch approaches to quality improvement, perhaps by reimbursing providers for regulatory compliance or offering quality trainings outside of an eligibility framework.