Market Insights Vol 1: What Supply and Demand Looked Like in Q1

We're taking a look at available slots vs family demand in Q1, waitlist inequities, and more.

Welcome to the first edition of LegUp's Market Insights Report! Every day, organizations and agencies like yours are working hard to strengthen the child care community, and making important decisions in the field to help shape the future of child care in this country. LegUp's Market Insights Report offers a glimpse into the data we provide our partners with, so that they can continue to advocate for programs and create data-driven solutions.

Let’s dive into the data!


The Supply/Demand Imbalance


What does this data tell us?

Right away, our Q1 data shows that there’s a misalignment between supply and demand: There is supply, it just doesn’t fit the exact demand.

We see the majority of open seats for care for children 60 months or older, but the greatest need for families for infant care is for 0-12 month olds. We know that families looking for care for 0-12 month olds either do not have paid leave or have recently returned from paid leave and are in desperate need of care. Regardless of their access to paid leave benefits, child care is still an issue that has not been solved.

As a result of this misalignment, providers are losing revenue with those open seats. Every day that those seats stay open means providers’ already limited profits are decreasing. In a time where providers have been pushed to the brink of collapse, those open seats can translate to staying in business or not.


Waitlists: Inequity Starts Before Families Enter Care

LegUp is seeing a large number of private pay families join waitlists before their child is even born. This is creating an equity issue for families who qualify for subsidies because before their child is even born, they’re already behind in finding them quality care. Because of how obtaining subsidies works in many states, often families need to find care before getting their subsidy. As a result of that and other factors, low-income families aren’t joining waitlists before their children are born so they’re less likely to access infant care. 

Access to quality infant care is so crucial for healthy development for children, but also for families staying in the workforce. Because of this disparity, low-income working parents are being penalized before even becoming parents. We know that parents who are most vulnerable to leave the workforce or decline a job do so before their children turn three. So if we want to keep working parents in the workforce, we need to pay attention to those most vulnerable to leave as a result of child care issues. 


A Note from Jessica Eggert, CEO of LegUp

In an unfathomable year that required providers to make so many tough decisions, we’ve seen incredible resilience from child care providers. We are encouraged to see enrollments finally start to increase in Q1 for both family child care homes and centers. Along with enrollments, we’ve also seen future demand for child care rise; the average waitlist signups per program increased more than 200% in Q1 from Q4. Additionally, 86% of families that joined waitlists in the past three months are looking for care this year, and 75% of those families were ready to enroll in the next six months. I remain optimistic that we are starting to see a post-COVID wave, and programs will continue to see revenue growth. 

But the decrease in COVID restrictions doesn’t fully free programs from their capacity issues. Our team speaks with child care programs of all sizes across the country daily, and the number one concern is their inability to hire staff. It not only keeps programs from operating at full capacity, but limits their ability to manage the day-to-day functions of running a program. And as the need to hire talent increases for corporations, we fear that parents of young children will be left behind.

The historic funding increase to our early learning under the American Rescue Plan can help stabilize the child care industry through both tried-and-true and innovative solutions. While there are parameters for states to spend these funds quickly, there is also a fear that this is a one-time investment; short-term investments may not be sustainable without also investing in long-term initiatives like data collection and cross-sector collaboration that can lead to greater impact. 


COVID-19 has required a re-think of how we support our child care programs, the child care workforce, and families. We’re excited to see how states will shape this next generation of child care innovation. 

Jessica Eggert
CEO of LegUp