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The limitations of using market rates for setting child care subsidy rates

While most industries are concerned about the long-term impact of forced closures and drops in revenue, the child care industry faces additional issues, including extremely limited public financing, an artificially depressed market, and payment rates that represent only a fraction of the actual cost of child care. As we look beyond the current crisis, we must examine how the public funding of child care is handled so we can build back better. This brief examines how states set child care reimbursement rates and argues we must move past arbitrary market rates and instead focus on the true cost of providing high-quality child care. (author abstract)
Resource Type:
Fact Sheets & Briefs
United States

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