For 2.5 million infants and toddlers, enrollment in day care marks their first separation from their parents during years that are critical to their total development. For 3.7 million preschoolers, day care has the potential to expose them to beneficial experiences that will better prepare them for their first years in school. For slightly more than 4.9 million school-age children 13 and under, their experiences in day care before and after school may be intertwined with school activities. Children aged 10 to 13 are less likely than those in other age groups to be in day care because many parents consider them to be old enough to look after themselves when not in school.

The Federal Government-mostly the Department of Health, Education, and Welfare (HEW)-subsidized approximately $2.5 billion of childcare arrangements in 1976. In 1975, parents spent $6.3 billion for privately purchased day

care.

As a Department concerned with the well-being of all children, HEW has a fundamental responsibility to assure that the children and parents assisted by its programs are well served and that day care funds entrusted to the Department are well spent. HEW has a special responsibility for young children who cannot protect their own interests.

Most of the day care arrangements financially assisted by HEW funds are regulated by the Federal Interagency Day Care Requirements (FIDCR), which are published Federal regulations authorized by Congress. The FIDCR were promulgated in 1968; in 1975, the FIDCR were modified and incorporated into Title XX of the Social Security Act.

In 1975, Congress also mandated the Secretary of HEW to evaluate the appropriateness of the day care requirement imposed by Title XX. This report responds to that mandate. It concludes that:

Federal regulation of federally-supported day care is appropriate.

The FIDCR can be rewritten, based on 10 years of experience, to improve their ability to protect and enhance the well-being of children.

This report is the result of 3 years of extensive study by HEW of research in the field of day care; of 21 state-of-the-art papers specially commissioned for this project; and of comments from practitioners, parents, administrators, and other parties interested in day care.

As this report was being completed, the Secretary of HEW announced that the Department was beginning the process of revising the FIDCR. Details of this process are described in Chapter 5.

CHAPTER 1-A PERSPECTIVE ON THE FIDCR AND DAY CARE

The largest single Federal day care program is carried out by HEW under Title XX of the Social Security Act. In 1976, about one-third of federally supported day care was provided under Title XX, underwriting care for more than 600,000 children.

The planned Title XX day care expenditures remained relatively constant in fiscal years 1976 ($759 million), 1977 ($742 million), and 1978 ($772 million), even though Congress enacted supplemental appropriations of $200 million above the ceiling in both 1977 and 1978 to help States meet the requirements imposed by the FIDCR. Many States, however, decided not to increase day care expenditures.

THE VARIETIES OF DAY CARE

There are three types of day care: in-home (provided in the child's own home); family (provided in the caregiver's home); and center (provided in a center serving more than 12 children).

Providers of each type vary widely in background, experience, and expertise. They range from grandmothers and other close relatives to homemakers with children of their own to small business entrepreneurs to professionals with graduate degrees in child development. Their duties are the same, however: to protect the child from physical harm, to feed the child and minister to the child's health needs, to set disciplinary limits for the child, and to nurture the child in his or her development.

This study concludes that appropriateness must be evaluated in terms of what the FIDCR are intended to accomplish. This study concludes that, although the principal purpose of day care is to help parents to work and to achieve selfsupport, the principal purpose of the FIDCR is to facilitate the appropriate social, emotional, physical, and cognitive growth of children in Title XX day care.

Chapter 2 of this report examines research, expert opinion, and consensus of practical experience on the effects of the FIDCR components on reducing risk of

harm and on promoting the well-being of children in care. Chapter 3 presents estimates of what certain FIDCR provisions cost. Chapter 4 analyzes the efforts by the Federal and State governments to implement the FIDCR. Drawing on the data presented in the earlier chapters, Chapter 5 discusses the kinds of policy choices confronting the Department and presents preliminary findings and conclusions, recommendations, and HEW's plans for developing new FIDCR.

CHAPTER 2-IMPACT OF THE FIDCR ON CHILDREN IN DAY CARE

The FIDCR cannot be tested with laboratory precision because they lack clarity and specificity, and are not uniformly in operation in the field. But their appropriateness can be assessed, based on experience and available research. The basic criterion for assessment is the effect of the regulations on the well-being of the children in care. Chapter 2 discusses the FIDCR components and assesses them in terms of that criterion.

GROUPING OF CHILDREN

Child-staff ratio and group size are the regulatable aspects of day care that are most directly related to the amount and nature of personal attention that caregivers can give children. Evidence shows that small groups of children and caregivers best promote competent child development. Group size should vary according to the ages of the children in care and whether there are children, such as the handicapped, with special needs. Small groups are especially important for children under age 3.

Low child-staff ratios and small group sizes may in themselves guarantee very little about the quality of care children receive, because they interact with other components of day care-such as caregiver competence. Any revision to the FIDCR should take this interrelatedness into account.

Important natural variation in group size and child-staff ratios occurs in a center or family day care home during the day and throughout the year. This variation must be accommodated by any administrative regulations.

CAREGIVER QUALIFICATIONS

Limited research data exist in the differential effects of various types of education, credentials, experience, and inservice training on caregiver behavior. Research data and expert opinion reveal, however, that (1) specific caregiving skills are needed to support the well-being of the child, (2) training can be used to promote these skills, and (3) training is essential to refine or improve current caregiver performance in all modes of care.

EDUCATIONAL OR DEVELOPMENTAL SERVICES

Educational (or developmental) services should lay the groundwork for continued cognitive, social, emotional, and physical development. This can best be achieved by clearly defined program objectives, quality caregiving, and ageappropriate materials. This is important for all children, regardless of age.

Data indicate a disproportionate prevalence of developmental risk among children of low-income families. Over time, that risk impairs their ability to thrive. The optional nature of, as well as the broader developmental goals intended by, this component must be clarified and refined.

ENVIRONMENTAL STANDARDS

There is no assurance that State and local safety and sanitation codes adequately protect the well-being of the child in the day care environment. Many codes were written for facilities other than day care, and these codes do not cover the safety of play equipment.

The type of space is not the only important aspect of environment. Also important are play materials and privacy.

HEALTH SERVICES

A considerable portion of children in Title XX day care at risk with regard to their health. The present standards address all the areas of concern regarding the child's health status both within and outside the day care setting, but there are problems associated with their implementation. Day care providers can more reasonably be expected to be responsible for quality control and preventive functions for health problems than to deliver health care services.

NUTRITIONAL SERVICES

It is important to provide children with nutritious meals and snacks in day care to help insure that their overall diets are nutritionally sound. As many as a third of the children currently eligible for federally funded day care are likely to be at risk in terms of inadequate caloric intake and vitamin deficiencies. Many family day care providers lack a basic understanding of good nutrition and resources to provide adequate nutritional services to the children they serve.

PRESENT INVOLVEMENT

Underlying the Parent Involvement component is the belief that children in day care will benefit from the participation of their parents in the program. The data available on parent involvement in day care generally indicate relatively low levels of parent participation in such activities as policy planning and budget review. Educational workshops that provide childbearing information appear to be popular among parents. Several research and demonstration projects show that when parents receive rigorous training in caregiving skills and tutoring techniques, their children show significant social, emotional, and cognitive developmental gains. Parents become more sensitive to their children's needs and interact with their children in cognitively appropriate ways.

SOCIAL SERVICES

This FIDCR component impacts only indirectly on the child in care. It is nonetheless important because many childcare experts believe no short-term intervention program can succeed in supporting the competent development of a child whose family is overwhelmed by its socioeconomic plight or other problems. Most parents want referral services that will help them select appropriate day care for their child. This need is largely unmet across the country. As with the Health Services component, the emphasis of this component should be on information and referral to other social services.

ASPECTS OF DAY CARE NOT ADDRESSED BY THE FIDCR

Chapter 2 also examines four aspects of day care not currently regulated by the FIDCR.

Continuity of care

A great deal of research describes the negative effects on children of all agesand especially on young children-of caregiver instability and inconsistency in caregiving environments. Continuity of care apparently is not enhanced by current regulatory/administrative practices. Although evidence suggests that this variable could not be easily regulated, the impact of Title XX policies-including the FIDCR-on continuity of care should be considered in developing new FIDCR. Age of entry into day care

There are no data that specify the earliest age at which a child can be separated from the primary caregiver (usually the mother) for an extended period each day without suffering negative developmental consequences. There is insufficient evidence to suggest that this component should be regulated.

Hours in care

Parents who seek childcare arrangements because of employment probably think of the hours of service more in terms of their own needs than of the impact on their children. The impact of hours in care on child well-being has not been adequately assessed to suggest if this variable should or can be regulated. Program size

Data on the relationship between program size and quality of care are meager, but the results suggest that the bigger the program, the bigger the problems. Some of these problems, which include negative interaction patterns between teachers and children and high levels of staff turnover, are indicators of poor quality care. Many problems of size can be overcome by proper management. At present, however, the evidence is insufficient to justify regulating this variable.

CHAPTER 3-COST IMPLICATIONS OF THE FIDCR

Three major questions concerning the cost of the FIDCR are:

Does meeting the FIDCR raise costs significantly above those of privatepay care?

What is the cost of bringing all Federal financial participation (FFP) day care facilities into compliance with the FIDCR? (FFP facilities are those receiving Federal funds.)

How much do the comprehensive services now provided in FFP care add to its cost?

The chapter addresses FIDCR related costs for the three major types of childcare center, family, and in-home. Centers receive the most emphasis because they are more likely than other facilities to be federally supported and because more is known about center care than the other two.

FIDCR COSTS FOR DAY CARE CENTERS

The FIDCR are minimum requirements that States must enforce to receive Federal funds for childcare. The additional cost of care that results from meeting those requirements might be measured in several ways. This report uses cost estimates of the minimum compliance effort, based on a reasonable reading of the Monitoring Guide of the Administration for Public Services. States and providers may choose to go beyond the minimum requirements, of course.

Of all nine FIDCR requirements, only that regulating child-staff ratios permits a specific numerical estimate of the additional expenses of meeting that requirement. However, technical and definitional problems make even these estimates subject to significant differences in interpretation.

Using the National Day Care Study-Supply Study data and a relatively lenient method of measuring compliance, it would appear that meeting the ratio requirement would increase the average cost of care per child an estimated $19 a month or $227 a year compared to non-FFP centers. This means that FFP children in centers meeting the FIDCR will receive care that is significantly more expensive than that purchased by parents in centers serving only private pay children. Moreover, it is likely that the majority of the non-FFP centers could not meet the cost of the FIDCR child-staff ratio requirement and continue to serve private-pay children unless some subsidy were available for all the children in their care.

It appears that meeting the non-staffing requirements of FIDCR, using the minimum compliance interpretation, adds little to the resources generally offered by private day care or already mandated by most State licensing standards.

A 1976-77 survey estimated that 5,500 more full-time caregivers were needed nationwide to bring into compliance the FFP centers not meeting FIDCR childstaff ratio requirements. Estimates of the total cost to hire those caregivers range from $33 million to $44 million a year, depending on the wages and fringe benefits offered.

Many FFP centers complying with the FIDCR have staff beyond what the regulations require. The 1976-77 survey estimated 12,400 such staff. To the extent that any of the 12,400 staff now employed in excess of the FIDCR requirement could be reduced through attrition or shifted to non-complying centers through transfer, the net cost of meeting the staff ratio requirements would be reduced. Transfers would be most practical in centers operated by school districts or other governmental units (about 10 percent of all centers). Each thousand extra full-time equivalent staff reassigned or eliminated results in an annual reduction of $6 million to $8 million in salary costs.

Finally, nonprofit FFP centers often provide comprehensive services (e.g., meals, transportation, and social services) that appear to go beyond those required by the minimum interpretation of the FIDCR and beyond the services offered by for-profit FFP providers. These extra services, lower child-staff ratios, and higher wages push the total average monthly cost per child up to $190. That is $70 more than in nonprofit centers serving only private fee-paying parents, and considerably more than low- or middle-income families are likely to pay without Government financial assistance.

The higher cost of care in FFP centers is only one factor-but an important factor-in explaining why FFP children in day care tend to be separated from those in non-FFP care. At present, 40 percent of nonprofit, nonwaiverable centers serve only FFP children. Another 20 percent serve between 75 and 99 percent FFP children. It is likely that roughly 50 percent of FFP children in centers are in exclusively FFP facilities. Enforcing the FIDCR would probably result in some increase in the separation of the FFP and non-FFP children.

Of course, other factors lead to separation of FFP and non-FFP children. Examples of such factors are a center's location and State and local Title XX agency policies (e.g., New York City contracts with organizations to provide care exclusively for FFP children).

FIDCR COSTS FOR FAMILY DAY CARE

More than 5 million children are cared for in homes other than their own for at least 10 hours a week. In contrast to the center market, federally funded care is a small fraction of total family day care; only about 140,000 children received FFP family care for the fourth quarter of fiscal year 1976.

According to the FIDCR, FFP family facilities must be licensed. The individual licensing and Title XX policies of each State determine in large measure the impact of the FIDCR on family day care. For example, State policies determine whether relatives and friends can be certified to care for a Title XX child.

A section-by-section analysis of the FIDCR shows that none of the key family day care provisions (e.g., on the number of children in a home, training, licensing, monitoring, etc.) necessarily mean that reimbursement per FFP child would be substantially above the average fees charged for private-pay care. However, some State and local policies lead to substantial costs for training, support services, licensing, and monitoring.

IN-HOME CARE AND THE FIDCR

Nineteen percent of FFP children are served by in-home care. Little is known about its cost and characteristics. Until much more is known about wage rates and other aspects of in-home care, the additional costs (and benefits) of support services and training for these providers cannot be determined.

CHAPTER 4-ADMINISTRATION OF THE FIDCR

There are vertical and horizontal layers of regulation affecting day care programs. Vertically, the Federal, State, and local governments regulate day care. Horizontally, several Federal departments and agencies are involved and the States and localities also have several regulatory bureaucracies concerned with day care.

The administrative issues surrounding the FIDCR include:

The relationship of the FIDCR to State licensing standards.

The record of the Federal Government in developing, implementing, and enforcing the FIDCR.

The ability of the States to administer the regulations.

STATE STANDARDS

State licensing standards prescribe minimum standards of performance that must be met by all State day care programs to operate legally.

It is difficult to compare State standards with the FIDCR because of the lack of research data on the State standards and because State standards often include local code requirements. States also differ in respect to what components of a day care program they regulate and in how they apply the standards.

State standards for center programs come the closest to regulating the same day care components as the FIDCR. Almost all States regulate child-staff ratios and the environmental, administrative, health and safety, and educational aspects of day care center programs. They are less unanimous in including requirements for staff qualifications and staff training and regulating group size. On the whole, States do not support establishing licensing rquirements for social services, parent involvement, and program evaluation.

For family day care, both the FIDCR and State standards establish childstaff ratios, and facility, health, and safety requirements, but other areas of the FIDCR have little similarity with State standards. However, for five States, standards apply only to federally funded programs.

Only 20 States have any requirements for in-home care. FIDCR do not include standards for in-home care, relying on States to develop this type of regulation. The fact that a State standard addresses requirements for the same components as the FIDCR does not speak to either the adequacy or specificity of that standard. States do not always regulate the same aspects of a particular component, and it is frequently difficult to determine if the elements being regulated are comparable in importance.

In conclusion, although State licensing standards have become more stringent in the past 10 years, the evidence indicates that these standards still do not insure a minimum level of program performance when judged by their comprehensiveness.