child care in cook county - Illinois Action for Children

A P P E N D I X 2The Demand for and Supply ofChild Care—Basic FactorsWHY DEMAND ANDSUPPLY?Many analysts believe that understandingthe demand for and supplyof child care is critical. Withoutsuch knowledge, we can neverknow whether a region such asCook County has enough child careservices. Nor can we understandwhy child care prices are rising orwhat the effects of rising rates are:for example, whether rising pricesprimarily drive working parents awayfrom using child care or primarilyencourage child care providers toexpand and provide higher qualitycare. Finally, understanding supplyand demand helps us understandways to influence child care prices,expand the use of child care amongworking parents and improve childcare quality. This Appendix discussesthe basic concepts of demand andsupply in child care and shows whyit is so difficult to speak about themauthoritatively.DemandFamilies with children who want andcan afford to place their children inchild care are the source for demandfor child care in Cook County. Theirdemand is simply how much childcare services they would buy at agoing price. In general, the size ofthis demand depends upon the num -ber of children of child care age inthose families, from infants to olderchildren needing before- or afterschoolcare. Demand also hasdeeper roots including these factors:• Whether family incomes aresufficient to pay for child care,especially in comparison to theprices of other necessities thefamily buys.• Whether families have access tochild care assistance programsto help pay for child care whenthey cannot afford to buy itdirectly. For example, workingfamilies’ access to CCAP since1997 has provided a powerfulstimulus to demand for childcare in Illinois.• Whether parents can afford tostay at home with children orreceive income from programssuch as the now-terminatedAid to Families with DependentChildren that allows them toremain home with children.• Whether families have availablesubstitutes to purchasing childcare, such as these:• Relatives who can care forchildren while parents work.• Alternative care that is availableand subsidized (HeadStart, Preschool for All, andso on).• Work schedules that allowparents in two-parent familiesto share care—one caring forchildren while the other works.• Parents’ preferences aboutletting others care for their children.This factor behind parents’demand often depends on thechild’s age.• Parents’ perceptions of the qualityof care available.How much child care Cook Countyfamilies will want to purchase dependson all of these factors. With thesefactors in the background, theamount of care families actuallypurchase and use depends on theprice and availability (or supply) ofthis care.SupplyIndividual providers, educators,non-profit enterprises, for-profitenterprises, and public agenciessupply child care services in CookCounty by mobilizing people, facilities,and materials for the purposeof caring for children. As Section IIof this Report demonstrates, childcare takes a variety of shapesacross Cook County, includingproviders in their own homes, caregiverswho go to the children’shomes, non-profit and for-profit centers,public and private preschools,after-school programs, and so on.Many child care program developersand directors also engage diverseagencies that finance, regulate zoning,license, and accredit child care.Finally, they recruit in labor marketsfor the child care workforce andcontract with suppliers of goodsand services, such as food, buildingmaintenance, and books.Child care supply is based upon thewillingness and ability of providersto bring people and such resourcestogether given the cost of theresources they need. Among thefactors that we expect to influencethe supply of child care services inCook County are the following:• The cost of resources such asfacilities, materials, equipment,supplies, overhead, and especiallyemployees.37