Family Day Care Businesses:
An Exploratory Study of Training and Technical Assistance Effectiveness
Donna Rubens, PhD

Director of Development and Evaluation Research
Women's Housing and Economic Development Corporation

Report Prepared for The Aspen Institute

FIELD (the Microenterprise Fund for Innovation, Effectiveness, learning, and Dissemination) project Training and Technical Assistance Cluster

(For a hard copy of this report, please call 718-839-1126)

The executive summary presents findings from a two-year study of training and technical assistance effectiveness funded through The Aspen Institute FIELD project Training and Technical Assistance Cluster. The research responded to the gap in our knowledge about “how clients use newly gained information or skills in their businesses, and what they perceive to be most useful.” As the RFP pointed out, “Without that information, it is difficult to assess the relationship between what is conveyed through course work, or one-on-one assistance, and client success at starting, stabilizing or expanding a business.”

The Women’s Housing and Economic Development Corporation (WHEDCO) operates a Family Day Care Training and Network Support program that is well suited to a study of training effectiveness where it counts: in the course of business operations and development. Unlike the training/“post-training” model with a discrete training cycle and follow-up activities, family day care training is a seamless, long-term, ongoing process of professional development that starts with the state registration process and continues for the life of the business. The platform for training is the family day care Network, a type of community-based membership association that recruits, trains, monitors, and assesses regulated family day care providers and provides information to parents about child care options. Most regulated providers belong to one or more of these Networks.

Unlike many Networks that offer core training, WHEDCO’s Network offers the full spectrum of training and technical assistance (TA) services that address the four key dimensions of family day care enterprises: Regulatory Compliance, Child Development, Business Management, and Income & Enrollment.

The research was conducted by the Women’s Housing and Economic Development Corporation (WHEDCO) in the South Bronx in New York City, one of five FIELD grantees in the Training and Technical Assistance Cluster and the only Cluster member focused on a single sector of microenterprise.

The study contributes to the field’s knowledge about the building blocks of a successful child care enterprise. In addition, we put the knowledge to use in our own program: we added three new business development workshops; strengthened the service planning process; developed, tested, and refined three new assessment and service planning tools; and shifted our program model to guide our clients toward better business outcomes. In addition, the findings are the basis for a policy agenda related to the child care workforce and welfare reform. The study raised many unanswered questions central to the research and beyond its original boundaries that are topics for future research.

I. Industry and Market Dynamics

Training low income microentrepreneurs for success in the family day care field is a challenging enterprise. These businesses operate in a complex regulatory and policy environment and must confront ever fluctuating market and industry dynamics that limit business growth and income generation. To help these businesses navigate through this tricky terrain, the industry includes an array of nonprofit agencies to help bring providers and parents together in the marketplace and improve providers’ earning potential. On the supply side these agencies include Family Day Care Networks that recruit, train, monitor, assess, and advise regulated family day care providers. On the demand side, acting on parents’ behalf, Child Care Resource & Referral (CCR&R) agencies provide information to parents about child care options and make referrals, as do welfare agencies and other governmental units that serve low income clients.

Figure A: Supply and Demand in the Family Day Care Industry

Child care need far exceeds supply

In the city of New York there are 11,814 registered family day care providers and 1,116 licensed Group Family Day Care providers according to the New York City Department of Health registry. Family Day Care providers are legally permitted to care for five or six preschool children at the same time (plus one additional school-age child after school. Larger Group Family Day Care homes can care for 12 to 14 children at the same time, plus two children after school. Collectively these providers have capacity for approximately 28,000 children.

On the demand side are the 219,711 children ages birth to six who require out of home full-day care. According to the latest figures compiled by the city’s leading Child Care Resource & Referral agency, Child Care, Inc., only 98,314 spaces exist in regulated full day programs, a shortage of 121,397 slots. Families with infants have the hardest time finding regulated home-based care. There are only enough spaces for 20% of the 100,969 infants (ages 0-2) needing full day out of home care.

Parents choose informal caregivers over regulated providers

Consumers may view this shortage as less critical than policymakers and child care advocates do. Most families use unregulated, informal caregivers for many reasons: familiarity with the caregiver who may be a relative or friend, convenience, lack of understanding about the advantages of regulated care, lower costs of unregulated care, and a desire to channel scarce child care dollars to neighbors, family, and friends.

As a result, regulated providers compete for clients with informal caregivers. This is particularly true in the market for welfare families needing child care. The city’s welfare agency, the Human Resources Administration (HRA), purchases child care services for welfare recipients almost exclusively from informal caregivers. This is not true for the Agency for Child Development, which purchases services almost exclusively from regulated providers on behalf of working families. Among children receiving child care administered by the HRA, 89% (33,819 children) were in informal care and these children represent 36% of all children in subsidized care.

Home-based providers also compete with center-based care. In New York City private child care centers have spaces for 35,448 children and city-subsidized child care centers have spaces for 24,866 children. Because home-based and center-based child care providers are not spaced evenly throughout the marketplace, many providers face high competition within their building, on their street, or in their immediate neighborhood.

Given scarce subsidies and inconsistent demand, good clients are hard to come by

Another aspect of the dynamics of care are the difficulties accessing “good” clients, meaning those who can pay the standard Market Rate (out of pocket or through subsidies) and who need steady long-term care for their children. In a poor neighborhood, the best client is a subsidized working family needing long-term continuous care who holds a coveted child care voucher issued by the Agency for Child Development (ACD). The ACD voucher reimburses providers at the official Weekly Market Rate for services. The current rate for full-time care is $103 weekly for preschool children ages 3-5 and $127 per week for infants and toddlers age ages 0-2. Other rates apply to school-age children and children cared for part-time or on an hourly basis. The Market Rate is the maximum level of payment that New York State will reimburse a provider for care of a child eligible for subsidy. It is set at the 75^th percentile of reported fees charged by programs in each locality. It does not necessarily reflect the actual cost of providing a quality service.

Among the least desirable clients are parents on public assistance holding time-limited subsidies and subject to loss of subsidies at any time due to sanctions, case closing, failure to apply for transitional child care benefits, or loss of eligibility. Until recently, due to the fragmentation in the city’s child care system, welfare parents who lost subsidies administered by the Human Resources Administration had to apply to the Agency for Child Development to continue receiving child care benefits. The waiting lists are often very long and ACD vouchers largely unavailable. The forthcoming shift to a unified system will benefit providers and parents tremendously because newly employed welfare parents will shift seamlessly to the ACD system of subsidies for working families.

Other less desirable market segments are the private pay families unable to afford the standard rates and private pay parents eligible for discounts such as sibling rates (some providers offer two for the price of one). Any parent needing only short-term or inconsistent care is less desirable as well, because the provider must build a large client base to maintain her enrollment at target levels. These dynamics require providers to be savvy marketers to reach and maintain their preset goals.

Figure B: Child Care Market Segments

(ranked from most likely to least likely to be steady clients that pay the standard rate)

1. Subsidized working families with child care vouchers	2. Private pay working families needing continuous, long-term care who can afford the full standard rate out-of-pocket
3. Subsidized working families for whom the provider is reimbursed through a city-contracted Network	4. Families on welfare receiving welfare to work or transitional child care benefits.
5. Private pay clients unable to afford standard rates.	6. Private pay clients with siblings subject to a lower, negotiated “sibling rate.

Earning potential in the industry is relatively high for microenterprise but few providers reach potential

Parents and providers collide in a low wage marketplace. Low income parents cannot afford the cost of quality care and the provider’s income is capped by regulations and the local fee structure. In a poor community like the South Bronx, the city’s reimbursement rate sets the ceiling for fees. Many parents cannot pay even this amount for full day care, which, at best, provides an hourly rate of $2.58 per child for children ages 3-5 and $3.18 for infants and toddlers ages 0-2.

A provider at full capacity with one of her own preschool children in care who enrolls one infant, three preschool children, and one school-age child in continuous care at standard rates for 48 weeks in the year has an earning potential of approximately $21,840, or approximately 150% of poverty for a family of three. This income is 44% lower than the Self-Sufficiency Standard for a family of two adults and one pre-school child in the Bronx and 51% less than the Standard for a family of three with one adult, one preschool and one school-age child (two common family arrangements among the provider community).[1]

Toni Porter, Director of the Center for Family Support, Bank Street College of Education, and a specialist in kith and kin care in poor neighborhoods, calculates that a “likely” earning potential in the industry amounts to $20,000 to $28,000. In the Aspen sample, high earners generated between $15,000 and $22,000, based on best available earning estimates.

Most providers earn less than $10,000, a figure that is comparable to the “average” low income microentrepreneur studied over the years.[2] On average, the businesses in the Aspen sample generated $9,862 over a 12-month period, based on partial and incomplete data for the years 1999 to 2001 year to date, with the average amount fluctuating in both directions quarter to quarter and year to year.

II. The Study

We asked ourselves three interrelated questions toward the goal of improving training effectiveness for providers most likely to succeed in business:

• Question 1. Do we teach them what they need to know?

• Question 2. How well do providers apply what we teach them?
• Question 3. How can we tell which providers will make a success out of their family day care businesses?

To answer these questions we selected an opportunistic sample of 20 providers new to our Family Day Care Network and studied them and their businesses over a two-year period. (Four providers entered the study further along to replace four who dropped out, but we collected two years of data on all participants). Coincidentally, the Aspen sample is representative of the Network as a whole, based on data for 182 current and recent Network members. Interestingly, the sample matches the demographics of the “typical” microentrepreneur nationally: older, more educated, more likely to be (or have been) married, and more likely to have worked in the past and to have current work experience apart from self-employment. Almost half the sample (45%) received TANF benefits at entry, and most (65%) received Food Stamps. More than a third of the sample (35%) cited Spanish as their primary language; 25% cited English as their primary language, and 40% of the sample are bilingual in English and Spanish. Most (12 participants) entered the study at the pre-startup phase and five others entered in the earliest stage of building the basics of a child care operation. Two providers entered the study at a more advanced stage with their businesses well underway. In one case the provider had been registered since 1994; in the second case the provider was recently registered but parlayed her advanced education (a masters in elementary special education) and professional contacts (her mother is a Head Start consultant) into a rapidly growing and sophisticated business.

Question 1. To learn if we teach providers what they need to know we studied the dynamics of the industry and marketplace in the context of the broader professional, regulatory, and policy environment. Then we compared what we found to what and how we teach, and our training model for service delivery.

To ensure we were being comprehensive, we teased out four separate but interrelated programmatic domains of family day care, which we refer to as the “building blocks” of family day care enterprises. The four building blocks are Regulatory Compliance, Child Development, Business Management, and Income & Enrollment. Analytically and programmatically, these four domains can be grouped into two major areas of focus: Child Care Operations, which includes regulatory compliance, child development, and the basics of business management, and Business Development, which includes more advanced business management skills and skills related to income generation and enrollment stability. Business Development is more properly the purview of microenterprise development.

Figure C: Building Blocks of Operating a Successful Family Day Care Business

Question 2. To understand how well providers apply what we teach them, we studied their enrollment patterns in training and technical assistance activities, evaluated their enterprises during Home Visits at four points in time, and observed their behavior and performance in the classroom setting. Assessments were based on a series of standardized checklists and self-evaluation instruments in widespread use in the field.

Question #3: To predict who would likely operate a successful family day care microenterprise, we followed the participants’ business trajectories over the two-year study period, gathered information about their earned income and enrollment patterns, grouped them into four categories according to business outcomes, and studied what each group had in common. At the end of the study we classified six businesses as moderately to highly successful according to industry standards; three businesses as “growing;” six as “inconsistent or struggling;” and four as “marginal.” An additional business was classified as a success from the provider’s standpoint (she operates a small-scale stable business with two children in care). Three struggling or marginal businesses closed, two for serious health reasons.

Figure D: Definitions of Success for Family Day Care

From the Standpoint of the Individual Family Day Care Business Owner	From the Industry Perspective	From a Social Policy Perspective
· The provider maintains enrollment at her targeted level for a minimum of three out of four quarters of the year.	· The provider is at full legal capacity for a minimum of 240 days a year (five days a week for 48 weeks).	· The provider maximizes the number of slots available for full-day care using such strategies as shift care and extended hours on evenings and weekends.
· The provider reaches 90% of her self-defined gross and net revenue goals.	· The provider generates $20,000 to $28,000 or more annually, based on earning potential for this industry (this can double for Group Family Day Care).	· The provider generates adequate income to reduce or eliminate the need for public subsidies. At minimum, the provider generates adequate income to transition off TANF.

The goal was to produce a list of indicators related to business outcomes, in order to align training and TA activities with the ingredients of business success. To give us a head start in this endeavor, we generated a preliminary list of indicators from two focus groups that met at the start of the project in June and July 1999. The focus groups mixed providers, trainers, and family day care specialists.

The result of this exercise was a list of 57 indicators related to business success from the industry perspective. The indicators relate to gross and net revenue generation and enrollment stability. These indicators represent behaviors, attitudes, and personal characteristics. Most describe specific business decisions and activities associated with a serious intent to grow a financially viable family day care business. The 11 personal descriptors seem to be preconditions for success.

Figure E: Indicators of Business Success

Business Management · Bank account · Expense records · Enrollment and daily attendance records · Parent/Provider Contract (initial and revised, as needed) · Payment receipt system or W-10 · Collection letter template · Tax filing · Schedule C filing · D.B.A. filing/tax ID	Business Development: Net Revenue · Enrolls in CACFP and claims monthly for all allowable meals · Files EITC · Knows allowable business expenses and records expenses on Schedule C · Secures EIP training scholarship · Secures Trickle Up grant · Files for wage support subsidy if eligible · Uses WHEDCO’s Resource Library for free books and toys · Secures free fire extinguisher, Health & Safety Kit through Network
Business Development: Target Enrollment and Enrollment Stability · Strategic marketing plan (initial and revised, as needed) · Effective flyer and other promotional materials · Number and quality of professional affiliations for referrals · Size of personal referral networks · Aggressive outreach · Niche marketing (e.g., After School, Extended Day, Weekend, Overnight, and 24-hour care; Sick children care; Special needs care) · Marketing to stable clientele · Accessibility of location · Level of competition · Attractiveness of setting for child development · Level of advocacy in campaigns to improve access to child care subsidies · Disciplinary skills · Interpersonal skills · Conflict resolution skills · Consistency of hours of operation · Availability to parents	Business Development: Gross Revenue · Business structure (Family/Group Family; ACD contractor, Head Start satellite) · Enrollment Cap · Number of children for which they are legally registered · Provider’s target enrollment · Number and age of own children in care · Number of days in operation annually · Business hours and scheduling structure to increase cumulative number of children in weekly care · Charges standard rate · Judicious use of sliding scale fee · Designs and enforces system for fee collection · Recruitment to a mix of private pay and subsidized clients · Advocacy activity (self or assisted) related to child care reimbursement · Level of advocacy related to building child care workforce
Personal Characteristics · Self-defines as a business owner · Sets business goals · Stays focused · Follows through with steps toward goals · Good Health · Absence of foster care responsibilities	· Level of spousal/family support · Degree of autonomy to make business decisions · Religiously informed value system · Educational ambition · Motive

III. Key Findings

Business development gets less attention in the training process compared to the focus on child care operations. The issue is not the amount or type of business training (although we did identify some gaps and weaknesses in our curricula), but the system of goal setting, monitoring, assessment, and accountability. Such a system is clearly in place for regulatory compliance and meeting professional standards for child development. The effectiveness of this system shows in the excellent results. The finding is no surprise. Family Day Care Networks concentrate resources on child care operations due to institutional pressure to ensure, first and foremost, that regulated providers operate safe, healthy, and stimulating day care homes.

It follows that participants did best in areas where they are most accountable, such as regulatory compliance, but demonstrated less skill in using knowledge to generate income and build a stable client base. This finding also can be explained by the fact that regulatory compliance is straightforward and simpler compared to the complex skill set required to operate a successful business or become an effective child development professional. As further explanation of why family day care operations are not usually high grossing businesses regardless of the amount and effectiveness of training is the fact that they operate in an unfriendly and unforgiving policy environment and cannot attract a high paying clientele.

Higher earners and those with growing businesses identify themselves as business owners and recognize that their service is a business. These identities are at the foreground and stand apart from their identity as caregivers.

Most high earners in the Aspen sample had stable contractual relationships with referring agencies that put an income floor under their businesses (ACD Networks and Head Start). Under these agreements three providers could count on incomes ranging from $16,800 to $19,200. Other strategies that mark high earners are extended hours (open nights and weekends) or shift care. The lowest earners were inconsistent in their hours or opened and closed their businesses erratically. (In this business temporary closings are not unusual to address crises or unexpected competing demands.)

Higher earners uphold the standard rate for most clients, secure access to subsidized parents, and enforce rates for friends and family. Those who generate low earnings negotiate sliding scale rates well below standard rates, offer generous discount packages (e.g.,“two for one” sibling rates), and make significant allowances for relatives or friends who make up the bulk of their clientele. As one marginal provider said, “I have a bad habit of feeling sorry for people.”

Even the most successful businesses fluctuate considerably over time due to a combination of factors; only some are under the provider’s control. Among factors not under their control are the vagaries of the city’s fragmented child care system. The city withholds child care benefits from public assistance clients at the slightest whim, fails to reimburse providers in a timely fashion leaving providers in the lurch, and leaves working families scrambling for scarce subsidies.

Most providers packaged income from multiple sources. These include intimate partners and spouses, other family members, public benefits accruing to them or members of their household, and supplementary wage employment.

Self-employment can be a route off welfare, if the provider is willing to risk losing public benefits in the face of uncertain and fluctuating self-employment income. Two of nine TANF recipients in the sample earned their way off welfare but two others kept earnings low to avoid a rapid loss of benefits that left them and their family worse off than ever. In one case the provider lived with her mother and was protecting her mothers’ housing subsidy. One left the rolls through marriage to a second wage earner.

Given that family day care operations are deeply embedded in the provider’s domestic circumstances, the provider’s personal and family characteristics shape their goals and outcomes. For those providers intent on growing a viable business (half the Aspen sample), preliminary findings suggest that preconditions for business success include autonomy to make business decisions; family involvement in the business (as staff, informal advisors, and sources of emotional or material support); a safe and attractive setting; good health; ability to stay focused; determination; professional demeanor; talent for self-promotion; ongoing engagement in aggressive recruitment of children; ability to engage children and communicate effectively with their parents about child development issues, child care policies and fees; and freedom from competing obligations including foster care.

Providers with struggling or marginal businesses cannot be helped equally and it is helpful to make some distinctions. Some created personal problems that distracted from their businesses (or allowed the problems to distract them); others were swamped by personal problems that legitimately required their total attention. Investments in the first group are less likely to pay off.

Classroom performance is a poor indicator of future business outcomes. The provider’s level of curiosity, cognitive ability, energy, commitment and follow-through is better measured in terms of actual, not hypothetical or simulated, business decisions and activities.

IV. Outcomes

WHEDCO generated two products from the research:

Training Matrix

The Training Matrix aligns WHEDCO’s training and TA activities with key indicators of business success. The Matrix shows which activities can be combined to help providers: 1) build a client base and stabilize enrollment; 2) increase gross revenue; 3) increase net revenue; 4) improve business management. For example, the Matrix shows that six training and TA activities build skills and knowledge about target marketing. These activities include Marketing Outreach, Preparing Promotional Materials, Trickle Up Application, Business Planning, Operations and Management Overview, Developing Family Day Care Contracts & Policies, Strategic Marketing (new), and Taking Care of Your Child Care Business.

In practice, staff will incorporate the Matrix into the Service Planning process, and use it as a planning document to guide curriculum development and to identify gaps in training. Providers will meet with staff during the quarterly review and assessment process to identify goals and schedule appropriate training. The Matrix helps staff and providers to see, at a glance, which activities relate to which discrete outcomes. In the process of preparing the Matrix, staff discovered the overlaps and interconnections among myriad training and TA activities and identified gaps in business training that will be filled with three new advanced workshops: Investment Strategies, Strategic Marketing, and Portfolio Development (planning, preparing and compiling contracts, resumes, references, and other materials useful for marketing purposes).

Figure F: Case Study

A Mature Business:

Carmen: An aggressive marketer with ambitious plans for expansion

Carmen came to WHEDCO with her business far advanced, having been in operation since 1994. She had considerable training through other networks, but WHEDCO was the most effective at advocacy when she had trouble collecting child care payments from the city. She could not believe her eyes when a worker from the welfare department’s BEGIN program showed up in person with a reimbursement check in hand.

Carmen is a savvy marketer who uses several strategies to maximize enrollment and increase revenue: she belongs to three referral networks including ACD, and remains open for shift care (7:30 am to 6 pm; 3 pm to 8:15 pm). She charges high end standard rates and a sliding scale weighted toward the high end. She taps her daughter’s business knowledge and computer skills. Her sister also is involved in the business; her son-in-law is planning to buy a house to open a child care center, and her nephew, who works for the fire department, is also planning to open a center. Her husband, who works as a technician for a hospital central supply department, loves the children. “They call him ‘Daddy” she says, proudly. She obviously loves her middle daughter who is her unpaid assistant and says “She has sugar in her kisses.” She has a savings account, carefully issues W-10 forms as receipts to parents to insure she has verification of what each parent has paid for tax purposes. She brings a lifetime of child care experience, having grown up in a family with fourteen siblings and fifty nieces and nephews.

However, her business is not as lucrative as she would like it to be. Open since 1994, she says that 1998 and half of 1999 were low periods with only two to four children in care despite aggressive leafleting and target marketing to families eligible for public subsidies. There was another six-month dip in her business starting in summer 2000 and some peaks and valleys since that time, a pattern that she cannot explain. She cared for twenty-two children between June 1999 and June 2001 through shift care, with an average length of stay of twenty-five weeks (but a range of a few weeks to several years). She applied for a Group Family Day Care license to double her legal cap, but was rejected by the Department of Health due to lack of space.

Carmen is no stranger to hard times. She has worked since the age of seventeen, including factory work and housekeeping. Her marriage fell apart for a while in the 1970s and she went on welfare for three years. She is an assertive, confident fighter who believes in her potential. Her family's medium term plan is to expand to a second location in Puerto Rico, where she, her husband, and sister want to relocate and ultimately retire, and turn the Bronx-based business over to her daughter.

Assessment and Service Planning Tools

The study documented the necessity to shift from an on-demand, client-driven training model to “guided choice.” Starting in fall 2000, staff assumed more of a proactive role with Network members to identify knowledge gaps and skill deficits and make recommendations for further training. Three planning and assessment instruments aid the process:

· Individual Logic Model. The Individual Logic Model is a graphic depiction of the logical links between the provider’s goals and specific strategies for reaching those goals, based on the provider’s particular characteristics and circumstances. Providers meet to review and revise the Logic Model quarterly. Completing the Logic Model is the first step in the Service Planning and goal setting process.

· Quarterly Work Plan. This worksheet is completed each quarter based on the Individual Logic Model and outcomes from the previous quarter. The worksheet is used to record the dates of training, completion dates, and the assessment of how well the provider met her goals. Providers are rated on a 3-point scale: Excellent, Satisfactory, Needs or Wants Improvement. These ratings become the basis for revising the Individual Logic Model and Quarterly Work Plan.

· Quarterly Assessment of Client Characteristics & Circumstances. This checklist is used to rate characteristics associated with business success on a 3-point scale: High, Medium, and Low. Some attributes are relatively static, such as housing condition, setting, and literacy; others are changing variables such as health. The checklist also is used to rate classroom performance as one (albeit imperfect) indicator of curiosity, academic ability, energy, commitment, and follow-through.

V. Conclusions and Implications for the Field

• Family Day Care training programs require tremendous resources to qualify as effective microenterprise development organizations given the pressures to concentrate staff time and expertise on regulatory compliance, child development, and the basics of business management. This has implications for hiring, staff training, tracking, service planning, curriculum development, and assessment.
• The Network is an effective training delivery model. As a specific form of trade and professional association, the Network works on both the supply and demand side of the industry and develops long-standing connections to business owners. The model is replicable for other sectoral training programs.
• The quarterly Home Visit, an institutional response to the public demand for monitoring and oversight to ensure compliance with health and safety regulations, is an effective means for assessing how clients use newly gained knowledge and skills about child care operations and a somewhat effective venue for assessing business success. It holds potential for this purpose. Expanding the scope of Home Visit assessment activities beyond child care operations has implications for staff training and the development of additional assessment tools. Home-based peer mentoring (previously tried with some success) may be an alternative.
• Effective training takes more than a good curriculum, good pedagogy, and good service delivery. If we want clients to learn what we teach and apply it effectively to their businesses, there needs to be a system of accountability in place. This requires disclosure about earned income and sales, and inducements to follow through. Training only programs are at a disadvantage compared to micro lenders, who can obligate business owners to hustle to generate adequate income to pay back the loan.
• The instability of family day care businesses and low levels of compensation argue for continued advocacy to supplement self-employment earnings. The Child Care Professional Retention Program, a subsidy administered by the New York State Office of Children and Family Services, is a modest first step but benefits the employed child care workforce more than self-employed family day care providers. A safety net for providers receiving public assistance is critical to encourage providers to take the risk to grow their businesses.

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[1] Pearce, Diana and Jennifer Brooks. The Self-Sufficiency Standard for the City of New York. Prepared for the Women’s Center for Education and Career Advancement, September 2000.

[2] e.g. Microenterprise as a Welfare to Work Strategy: Client Characteristics. Research Brief No. 1. The Aspen Institute, FIELD, May 2001.