Child Care and Early Childhood Education

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 a "success." 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, a number of 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.

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 two percentage points on one measure and seven 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.

Due to these severe limitations in research design, researchers are unable to attribute educational or developmental gains to participation in Smart Start or More at Four. For example, the Graham Center's 2003 evaluation of Smart Start concluded that causality between Smart Start participation, child care quality, and child outcomes could not be established. The most recent evaluation of More at Four, a pre-kindergarten program for at-risk 4-year-olds, offered the same warning. Worse, researchers have no plans to conduct new and improved evaluations of student academic preparation for either program.

More at Four

More at Four has been in operation since 2002, so it has not existed long enough to show that children enrolled in the program exhibit lasting gains in academic performance. A February 2008 report published by the Frank Porter Graham Child Development Institute assessed More at Four children from the beginning of their pre-kindergarten year to the end of their kindergarten year. This report found that most children retained the skills that they learned over this two-year period.

While that finding is not surprising, there is little guarantee that these children will maintain these skills into middle and high school, where students are most susceptible to falling behind their peers academically. In fact, research suggests that children who received an advantage by attending a preschool program often do not retain that advantage by the time they reach middle school.

Carolina Abecedarian Project

Advocates of state-funded early childhood education point to studies like the Carolina Abecedarian Project to justify expanding government expenditures on preschool programs. The Abecedarian study tracked the academic performance and occupational status of two groups of low-income students from infancy to age 21. A group of 57 children received high quality child care from infancy to age five, and a group of 54 children received no intervention at all. When the two groups were compared, the children who received high quality child care generally outperformed those who did not.

Because of the limitations of the study, we should be careful not to draw unwarranted conclusions about early childhood education programs for at-risk children. Some of the gaps between groups were not large or statistically significant. On cognitive tests, the gap between the two groups began to narrow or "fade out" as students entered high school. More importantly, the small sample of children, a problem in itself, was provided high quality child care. It is unlikely that More at Four sites are able to deliver the same kind of superior care to 20,000 children that Abecedarian Project researchers provided for 57.

Preschoolers and Day Care

Families are by far the most important providers of child care and 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, relatives, and neighbors supply the vast majority of care provided to preschoolers, and on a non-paid basis. Thus, day care and Smart Start subsidies offer little help to most families. A better approach would be to fund refundable tax credits for each preschool child.


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.

3. Yearly evaluations of Smart Start and More At Four should be resumed but redesigned using quasi-experimental research methods. In addition, longitudinal studies should be conducted to determine if state pre-kindergarten programs produce lasting social and educational benefits as children progress through school.