Market Insights Vol. 6: What Q3 Taught Us About Supply & Demand

We look back at Q3, how current supply and demand trends could affect providers, an exciting new partnership, and more.

Welcome to Vol. 6 of the Market Insights Report! This month, we’re reflecting on our top findings on Q3 supply and demand data and what it means for providers and working families in the near future. We’ll also spotlight one organization’s innovative approach to the staffing shortage, share an exciting new partnership announcement for the first time, and more. Let’s dive in!

Overall family demand continues to increase significantly, yet demand trends for care of each age group remains consistent.

As we saw in our Q2 Market Insights Report, we believe that staffing shortages are still impacting the existing supply, causing overall supply to remain relatively unchanged since last quarter

What do we know?

Misalignment continues with supply and demand, for both private pay and subsidy families.

  • Since Q2, we saw a 137% increase in the total number of families looking for 0 - 12 month care. This was higher than the 106% increase in the total number of families in need of 12 - 24 month care and 108% increase in search of 24 - 48 month care.

  • Supply for over 60 month care remains by far the largest age group with availability, with even a percentage increase since last quarter. What’s most worrisome to our team about these trends continuing is that the large supply of seats available for children over 60 months are in many cases still unfilled from last quarter. Unfilled seats for that length of time means a significant financial loss to providers, without any indication that those seats will be filled next quarter.

Family demands differed by payment type, indicating trends in how subsidy vs. private families could access care.

  • Care for 0 - 12 months and 24 - 48 month care remains in the highest demand overall for families.

  • However, for families paying with subsidies, the greatest need for care is 12 - 24 and 24 - 48 month care.

How could these trends impact providers and families?

We’ll continue to observe these trends over the next quarter to better understand the trajectory of the child care industry. Most notably, many providers do have open seats. However, they will likely remain unfilled if the recent waitlist trends continue. These openings are the direct revenue stream for providers, without which results in some cascading effects for their businesses. Compounded by the staffing shortages, without filling those seats and the consequential lost income, many programs will not be able to recover without a drastic change in either their business operations, revenue streams, or access to funding.


As LegUp talks to partners and advocates across the country, we are encouraged by the innovation, collaboration, and tireless work in communities nationwide to advance our field. Each month, we'll be taking a moment to highlight some of those efforts and encourage you to learn from others’ success. You can read more in-depth profiles on this work in our Around the Community posts.

Short staffing and the resulting consequences continue to impact child care providers, families, and businesses across the country. We’ve been on the search to find partners working to address this issue and wanted to highlight a notable solution in effect in Washington state.

The Imagine Institute is a grassroots professional development organization for and by education workers. Established through collective bargaining between members of SEIU Local 925 and the State of Washington to ensure that providers had a say over their own profession. One of the aspects of their work (which has been a great source of value for providers) is the Early Care and Education Substitute Pool. This substitute pool is designed to support family child care and child care center providers in their professional development. The Imagine Institute has been able to expand eligibility to their substitute pool, aiming to serve more providers throughout the state and help provide an immediate solution to this urgent need of providers. Learn more about their work here.


We’ve recently partnered with the Wisconsin Early Childhood Association to support the expansion of their Shared Service Alliance, Wisconsin Early Education Shared Services Network (WEESSN)! WEESSN supports child care providers across the state to strengthen their business operations, provide professional development opportunities and coaching, and advocate on their behalf. Through our work together, WEESSN will grow their shared services and features to further strengthen child care providers across Wisconsin. You can read more about all that they do for providers here.


I won’t sugar coat this: The supply and demand trends we observed this quarter were discouraging. Our team talks to providers everyday, and at times, hearing the frustration and low morale in their voices was disheartening. But in the face of mounting challenges, we’ve seen resilience time and time again in this field. And without being overly optimistic, I want to reflect on some of the positives that we’re seeing across the country, and highlight the progress that is happening despite these negative trends.

First, providers do have openings. For so many families, the search for child care is daunting, exhausting, and majorly stressful—the exact reason why I started LegUp! But in spite of the misalignment between the age groups of open seats and family needs, there are openings and some children will be able to enroll in those seats. For those families, that enrollment could mean a parent is able to stay in the workforce or take a promotion because they have stable care. It also means that child has access to quality teachers and peers to help support their growth and healthy development.

Second, families are joining waitlists. After months of program closures and the high stress many families experienced without child care, families are actively looking for quality care near where they live or work. Although they might still not be able to access that care, the demand is increasing, which means that providers will have the ability to earn stable revenue when there is better alignment between the open seats and family needs.

At LegUp we always try to look at the bigger child care ecosystem so that we can be part of the solution. But we can’t forget to remember the individuals within that system and the progress that they’re making because we’re enabling the connection families and providers. We will continue to explore the data, identify the areas of concern, and always look for the bright spots.

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