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Health and Human Services
Child Care & Preschool

One of the most controversial issues in the past few years has been the proper role of the state in providing child-care and preschool opportunities to North Carolina children. The Smart Start program was intended to be an innovative public-private partnership to facilitate local coordination of children’s services, but the program is mostly state-funded and focuses mainly on the minority of preschoolers in paid child care. North Carolina also affects the market through a tax credit for child-care expenses and through rules on personnel, facilities, amenities, and location of centers and homes that raise the price of care.

Smart Start's Shaky Debut

Smart Start was created in 1993 to help get North Carolina preschoolers ready to learn and thus boost educational performance. Until recently its effectiveness as a school-readiness intervention was impossible to estimate. This has not stopped some politicians from proclaiming Smart Start “successful.” In 1999, for example, Gov. Jim Hunt attributed apparent gains in North Carolina reading scores on 1998 national tests to the existence of Smart Start, even though the highest grade that students from Smart Start-supported preschools could have reached by 1998 was third grade and the reading tests were of fourth-graders.

Since early 1998, at least four studies of Smart Start’s impact on school readiness have been published that can provide fair-minded observers with critical information about its effectiveness. Although portrayed by news reports and elsewhere as proving Smart Start's success, the studies, when closely read, suggest a far different conclusion. The most recent and most comprehensive study — published in September 1999 by the Frank Porter Graham Child Development Center at UNC-Chapel Hill — found that the vast majority of Smart Start expenditures had no statistically significant effect on participants’ readiness to learn in kindergarten.

Researchers picked six counties where there were Smart Start partnerships and recruited an experimental group of children who had attended a Smart Start-supported child care center and a control group who had attended centers not involved in Smart Start. The researchers found no statistically significant differences between the two groups in kindergarten readiness assessments. There were positive results for a small subgroup of Smart Start children receiving the most attention, but they were so small in magnitude that, based on past experience with preschool programs such as Head Start, they are unlikely to last beyond first or second grade.

Previous research points to similar conclusions. In 1998, the Graham Center conducted a study of Smart Start in Orange County. A flawed study because it lacked a true control group, it still found no statistically significant impact on non-poor children and a modest gain for poor ones. A more valid study was conducted in 1998 in Mecklenburg County. It found no statistically significant impact on those who spent a single year in a Smart Start center. It did find a measurable gain for kids who stayed in such a center for three years, but once again, the gain was relatively small 2 percentage points on one measure and 7 percentage points on another. In early 1999 the Graham Center released a study of 200 Smart Start-supported centers that showed gains in child care quality but no impact on kindergarten readiness. More recently, a study of Charlotte-Mecklenburg’s Bright Beginnings program, which focuses more attention on academic preparation for at-risk preschoolers, found that participating third-graders did not outperform a control group of eligible children who didn’t participate.

Preschoolers And Day Care

As the nearby graph reveals, most preschoolers do not spend their days in centers or homes where paid staff take care of them. Stay-at-home mothers, working mothers and fathers, relatives, and neighbors supply the vast majority of care provided to preschoolers, and on a non-paid basis. Even for four-year-olds, where the likelihood of enrollment in day care is higher, the at-risk families politicians say they want to help are infrequent users. According to one study, about two-thirds of mothers who lack a high school education use no paid day care prior to kindergarten, compared with 22 percent of college graduates. Day care subsidies, teacher training, preschool playground grants, and the like cannot benefit the majority of poor families. For those families who do use paid day-care in some form, Smart Start is less efficient aid than simply expanding the eligibility or amount of day care vouchers already distributed by counties.

Families are by far the most important providers of preschool services. They do the most to get their children “ready to learn,” whether it be purchasing a book, making a visit to a doctor, or sacrificing significant income to rear their children at home. All of these investments in child development deserve the same subsidy, if any, given to those who choose services provided for pay outside the home. Furthermore, parents are in the best position to judge the quality of the day care or services they do purchase for their children. Contrary to popular belief, most families in public opinion surveys say they are satisfied with their day care arrangements.

Recommendations

1. Smart Start and other subsidy programs and tax credits for child-care and preschool expenses should be eliminated in favor of a refundable Smart Start tax credit for preschool children. Parents should also be able to make tax-deductible contributions into Educational Savings Accounts for use in paying preschool expenses or accumulating assets for the future educational needs of their children. For a smaller subset of desperately poor preschoolers who lack functioning parents, a carefully designed state intervention may be justified.
2. Policymakers should limit regulation of day-care operations to health and safety requirements only, letting parents make their own decisions about the trade-off between price and child-staff ratios or qualifications.

To view higher quality graphs, download Agenda 2002 [560KB Acrobat].