Estimating Changes in the Supply of and Demand for Child Care in Philadelphia (2018)

Estimating Changes in the Supply of and Demand for Child Care in Philadelphia Prepared by REINVESTMENT FUNDPublished JUNE 2019RESEARCH CONDUCTED BY Policy Solutions at Reinvestment FundJacob L Rosch, Senior Policy Analyst Alana Kim, Policy Analyst Janine Simmons, Policy Analyst Michael Norton, Chief Policy Analyst This work was supported by a grant from The William Penn Foundation. The opinions expressed in this report are those of the authors and do not necessarily reflect the views of The William Penn Foundation. Page 1 Estimating Changes in the Supply of and Demand for Child Care in Philadelphia Introduction In 2014, with support from The William Penn Foundation, Reinvestment Fund conducted an initial analysis of the supply of and demand for child care in Philadelphia to identify areas of the city where targeted investments could help address shortages of high-quality child care. Now in its fourth update, Reinvestment Fund’s 2018 childcare analysis provides updated estimates to track the change over time in the supply of, demand for, and shortages in child care. Reinvestment Fund’s Childcare Map is an interactive online tool, www.childcaremap.org, that makes the results of this work accessible to the public at no cost. The tool identifies neighborhoods where high-quality child care is scarce in absolute and relative terms, while also providing actionable information for funders, practitioners, and childcare advocates. This report presents the results of descriptive and spatial analyses of the child care landscape in Philadelphia in 2018. It details both short- and long-term changes in the supply of, demand for, and gaps in care; the year-to-year changes from 2017 to 2018, as well as shifts since the first analyses were conducted in 2014. It is important to note that various factors could contribute to the observed changes. For example, demographic shifts can affect demand, operation cost can affect supply, and new policy initiatives and investments can directly impact gaps. To this last point, this analysis also presents the location of strategic investments made in facilities in high-gap areas through the Fund for Quality (FFQ). Subsequent updates to the childcare analysis will be conducted to assess the impact of FFQ investments on gaps between supply and demand for child care in the years ahead. 2018 Key Findings • Over 13 percent of demand was unmet in 2018. With a total supply of 98,073 and a maximum potential demand of 113,001, Philadelphia registered an absolute shortage of childcare capacity of nearly 14,928 in 2018. Absolute shortage measures the raw difference between supply and maximum potential demand, not accounting for parents that choose in-home or informal care arrangements. • Supply grew slightly, while demand was relatively constant from 2017 to 2018. Estimated supply inched upward by 4% between 2017 and 2018 while maximum potential demand inched downward by 2.4 percent. • High-quality supply continued to grow. The number of high-quality seats has continued to rise. About 2,552 new high-quality seats were added since 2017. The number of high-quality seats has increased by 7,976 since 2014. • The most severe shortages in high-quality supply persist in specific neighborhoods. In 2018, the most severe relative shortages in high-quality child care continue to be in many of the same areas: parts of Northwest Philadelphia (Roxborough, Germantown); Southwest Philadelphia; the River Wards (Kensington/Fishtown, Port Richmond); several neighborhoods in the Northeast (Bustleton and Holmesburg). Shortages narrowed in Chestnut Hill, Northern Liberties, Overbrook Farms, Summerton, and Torresdale. Page 2 Estimating the Supply of Child Care Beginning in 2018, OCDEL altered the Keystone STARS rating system to change how programs are rated and to remove the “Not STAR Rated” designation. Going forward all sites formerly classified “Not STAR Rated” will be reclassified as 1 STAR. Additionally, changes to how programs can achieve a high-quality rating have the potential to substantially increase the number of high-quality rated sites in Philadelphia. The result of those changes does not yet appear to have substantially impacted the number of high-quality sites in the city. For more information about how changes to Keystone STARS will impact centers in Philadelphia, see Reinvestment Fund’s “Understanding How Changes to Keystone STARS Ratings Will Affect Gaps in the Supply of High-Quality Child Care” (https://goo.gl/hSb2nX). At the suggestion of the Foundation and various local stakeholders, for 2018, Reinvestment Fund also reclassified all Head Start and School District of Philadelphia childcare programs as high-quality. In the past, these programs would only be classified as high-quality if they participated in the Keystone STARS rating system and achieved a STAR 3 or STAR 4 rating. Many Head Start and School District sites lacked a STAR rating and were pre