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State Child Care Market Rate Surveys

States are required by the Child Care and Development Fund (CCDF) Final Rule to ensure that families receiving child care assistance have equal access to comparable care purchased by private-paying parents. A market rate survey (MRS) is a tool States use to achieve this program objective. Some States conduct a survey to collect the child care market rate, and other States use administrative data, such as data collected by child care resource and referral (CCR&R) and State licensing agencies to analyze the market rate for child care.

The following is an overview of State child care market rate studies and related resources, including a summary of the findings from a research project funded by the Child Care Bureau to examine State practices, and links to a sample of recent State child care market rates studies.

Child Care Market Rate Survey Methodology Study

The Child Care Bureau, Office of Family Assistance, funded a research project—Guidance for Validating Child Care Market Rate Surveys—to provide information about market rate studies. This information is intended to help States, Territories, and Tribes establish reimbursement rates for child care assistance programs funded through the CCDF. The study was conducted by the Oregon Child Care Research Partnership, Oregon State University Family Policy Program. It includes information from the 50 States and the District of Columbia, the 5 U.S. Territories, and 28 Tribes, all of which indicated that they had completed their own MRS since 2001. The following publications provide a summary of the study findings:

• The Validity of Child Care Market Rate Surveys (November 2005), by Arthur Emlen, Oregon Child Care Research Partnership, Oregon State University. www.childcareresearch.org/discover/pdf/validity-of-mrs.pdf
• Practices and Policies: Market Rate Surveys in States, Territories, and Tribes (May 2007), by Roberta B. Weber, Deana Grobe, Elizabeth E. Davis, Lee J. Kreader, and Clara C. Pratt, published by the Oregon Child Care Research Partnership. The report is available on the Web at www.childcareresearch.org/SendPdf?resourceId=12266; and State Profiles are available on the Web at www.childcareresearch.org/SendPdf?resourceId=12267.  

Key Findings from the Study Regarding State MRS Practices

• Twenty-six States (57 percent) used a single database to identify child care facilities;
• Sixteen States (35 percent) used only licensing data, and 10 States (22 percent) used only CCR&R agency data;
• Thirty-two States (68 percent) collected data through surveys, and 15 States (32 percent) used data contained in CCR&R or licensing databases; 
• Costs were lower when States obtained data from existing databases, such as a CCR&R system (14 States), or a child care licensing agency (1 State);
• Market rate studies using data collected by surveys averaged $46.50 per facility, while those using data from CCR&R agencies or licensing agencies averaged $5.97 per facility;
• On the whole, State CCDF administrators perceived their market rate studies to be accurate, cost effective, and easy to manage;
• Twenty States (43 percent) reported using the most recently completed MRS to review and adjust their maximum payment rates;
• State CCDF administrators most often reported being neither satisfied nor dissatisfied with the adequacy of payment rates, proportion of eligible families served, and the quality of subsidized child care;
• All States included licensed facilities, regardless of whether they collected data via surveys, CCR&R agencies, or licensing agencies;
• Twenty-four States (75 percent) that conducted an actual survey and 10 (67 percent) of the States that used CCR&R or licensing agency data excluded centers and family child care homes that were legally exempt from licensing;
• The majority of States had facilities convert their actual prices into a small set of predetermined modes when collecting data, and then reduced the number of modes further during analysis;
• Many States (approximately 90 percent) found a strong relationship between the age categories used in market rate studies and in licensing;
• All States treated school-age care separately, but 40 percent did not differentiate school-year prices from summer prices; and
• All States analyzed prices by type of care, although some only distinguished between center and family.

State Child Care Market Rate Studies

The National Child Care Information Center’s (NCCIC) examination of the CCDF Plans for Fiscal Years 2006–2007 and Market Rate Surveys revealed that some States conducted surveys, and other States analyzed existent administrative data collected by agencies such as CCDF Lead Agencies, CCR&R agencies, and/or the State child care licensing agencies. States used a variety of Government and private agencies to conduct analyses of child care market data. Some studies focused on the analysis of child care prices, and others included additional information about the market, including workforce statistics. The following provides information about the types of organizations involved in State analyses of child care market data:

• In 16 States (AK, AL, MI, MO, MS, ND, NE, NJ, NV, PA, SC, SD, UT, VA, WI, WV), the MRS was conducted by the CCDF Lead Agency alone or in concert with another State office.
• In 12 States (AR, CO, FL, HI, IA, ID, KS, KY, MD, MN, MT, WY), the CCR&R agencies assisted States with the MRS. In some States, the CCR&R agencies collected the data and were involved in the analyses of the survey data. In other States, the CCR&R agencies collected the data but did not conduct the analyses. 
• In 10 of these States (CO, FL, HI, IA, ID, KS, KY, MD, MN, MT), the CCR&R agencies used NACCRRAWare, the database software developed and used by the National Association of Child Care Resource and Referral Agencies (NACCRRA) to collect and analyze child care provider information.
• In Arkansas, four CCR&R agencies are contracted in February of each year to survey every licensed and registered caregiver in the State concerning rates.
• In Wyoming, the MRS was made available to licensed child care providers using the U.S. Postal Service and a Web survey tool. 

• In 13 States (CT, DC, GA, NC, NH, NM, OH, OK, OR, RI, TN, TX, WA) universities helped conduct the MRS. In some States, the universities conducted the survey, and in other States the universities analyzed data collected by other agencies, including CCR&R and State licensing agencies.
• Seven States (CA, DE, LA, MA, ME, NY, VT) reported that a consulting firm was engaged in conducting the MRS.
• Four States (IL, IN, SD, UT) engaged a combination of entities to collect and analyze child care market data.
• Indiana’s CCDF Lead Agency hired a consultant to conduct the market rate analysis using data collected by the CCR&R agency.
• In Illinois, the data were collected by CCR&R agencies and analyzed by the Department of Human and Community Development, University of Illinois at Urbana-Champaign.
• South Dakota’s survey was conducted by the CCDF Lead Agency and the South Dakota Department of Labor.
• In Utah, the CCDF Lead Agency analyzed data collected by the CCR&R agencies.
• One State (AZ) reported that the Lead Agency contracted a State county office of research and reporting to conduct the MRS.

The following is a sample of recent State child care market rate studies available on the Web, organized by the type of agency involved in the data collection and analysis, and the components of the MRS included in the document.

Additional Resources

• Child Care Assistance and the Market for Child Care in Minnesota (October 2005), by the Minnesota Child Care Policy Research Partnership.
  http://edocs.dhs.state.mn.us/lfserver/Legacy/DHS-4234-ENG 
• Report of the Build Subsidized Child Care Rate Policy Task Force: Recommendations for Action (June 2004), by the Child Care Subsidy Rate Policy Task Force, Pennsylvania Build Initiative, Pennsylvania Department of Education.
  www.pacca.org/PDF/RatePolicyReport--FINAL6.17.04.pdf
• Market Rate Study Guidebook: A Guide to Implementing a Child Care Market Rate Study Using Child Care Resource and Referral Data (September 2003), by Deana Grobe, Roberta B. Weber, Clara C. Pratt, and Arthur C. Emlen, Oregon Child Care Research Partnership. www.hhs.oregonstate.edu/familypolicy/occrp/publications/2003-ChildCareMarketRateStudyGuidebook.pdf
• Conducting Market Rate Surveys and Establishing Rate Policies (July 2001), eds. Eric Karolak, Ray Collins, and Louise Stoney, NCCIC, a service of the Child Care Bureau.
  http://nccic.acf.hhs.gov/pubs/conductmrs-erp.html

Updated July 2007