Employment in childcare and early education in the United States, 2000–23

When researchers refer to the paid “early childhood care and education workforce,” what do they mean? Industry classifications are designed to convey differences in the types of goods or services being provided, while occupation classifications are designed to convey differences in the type of work, or the “labor process.” While industry and occupation do not necessarily overlap, they are often complementary. However, early childhood care and education pose a classification challenge. Paid childcare is categorized in several different ways, partly because it takes various institutional forms. Some paid childcare is provided by small family daycare businesses located in the provider’s home, while some may be provided by for-profit or nonprofit daycare centers, both of which are designated within the child daycare services industry.¹ Still other forms of childcare are provided within children’s homes by household employees designated as part of the private household services industry.² And some is provided by public schools that have recently expanded their provision of pre-K programs, as part of the primary and secondary education industry (kindergarten services are primarily aimed at 5-year-olds, preschool at 4-year-olds and, occasionally, 3-year-olds).³

Individuals reporting an occupation classified as childcare worker or preschool and kindergarten teacher represent a substantial subset of the total paid labor force providing all such paid services.⁴ Childcare workers are primarily responsible for caring for children in daycare or similar settings, while preschool and kindergarten teachers focus on early childhood education and academic preparation. Many efforts to examine trends in childcare provision in the United States focus on these two occupations, often filtering them by industry or by type of employment. Differences in the way such filters are applied reduce the comparability of many estimates of the size and characteristics of the paid early childcare and education workforce, especially those based on annual national-level household surveys, such as the American Community Survey (ACS) and the Current Population Survey (CPS).

This article reviews several estimates of the size, composition, and personal characteristics of the paid early education and care workforce, highlighting categorical differences that have complicated measurements. Next, it mobilizes data from the ACS to describe trends in the composition and size of the paid early childcare and education workforce in the United States between 2000 and 2023.⁵ Over time, declines in the employment share of the child daycare services industry were accompanied by substantial increases in the shares in private household services and elementary and secondary education industries. Within the child daycare services industry, declines in the share of those identified within the childcare workers occupation were accompanied by substantial increases in the share identified as preschool and kindergarten teachers. These compositional shifts have implications for earnings from providers as well as the quality and cost of services for families.

Definitions of the paid early childcare and education workforce

Accurate and consistent definitions of the paid early childcare and education workforce are necessary for analysis of secular and cyclical changes in the supply of formal childcare services to parents of young children.⁶ Yet, definitions vary widely, depending on whether industry, occupation, or a combination of these categories is applied. Many employees in the childcare industry are not working in childcare occupations with the word “childcare” in their title, and many of those reporting childcare occupations do not work in an industry with the words “child” and “care” in their title. Measurement also varies based on whether self-employed childcare workers are included in the count. Such definitional inconsistencies make accurate comparisons difficult.

Many influential policy reports and empirical analyses rely on industry-based data, such as the child daycare services industry data from the U.S. Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) survey, as a proxy for the size of the childcare and early education workforce.⁷ CES does not include either those employed in the private household services industry (which includes “nannies”) or preschool and kindergarten teachers in the elementary and secondary education industry. It also omits employment in small-scale unlicensed and often unlisted family daycare businesses, simply because they are difficult to identify.⁸ Moreover, the industry-based estimate includes employees in the child daycare services industry who do not report their occupation as childcare or as preschool and kindergarten teachers. According to the 2023 ACS, about 30 percent of employees in the child daycare services industry did not list either childcare worker or preschool and kindergarten teacher as their occupation.

A different definition of employment in childcare, largely based on the age of those receiving services, has been applied by the National Survey of Early Childcare and Education (NSECE).⁹ The NSECE surveys are based on two broad age-based definitions: (1) all paid caregiving and educational services for children from birth to age 13 and (2) early care and education provided only for children from birth to age 5 who are not yet in kindergarten. This definition treats kindergarten as education rather than childcare, but the ACS groups preschool and kindergarten teachers together, making them indistinguishable.

The NSECE surveys explicitly acknowledge the heterogeneity of childcare services, fielding separate modules for household parents or guardians, home-based providers, family daycare businesses, directors of center-based care programs, and center-based staff. Their definition captures more occupations than the paid labor force reported in establishment surveys, such as CES.¹⁰ Still, it remains limited in some respects. The NSECE survey of home-based providers is limited to those that are officially listed, and it does not distinguish “nannies,” “babysitters,” or private household workers who describe their occupation from the “other nonrelative childcare” category, which could include those cared for by nonlisted family daycare businesses.¹¹

Over time, the distinction between early childhood “care” and early childhood “education” has diminished through the expansion of public kindergartens and, subsequently, as a result of the expansion of public preschool for 4-year-olds (and, increasingly, 3-year-olds) in many states.¹² Publicly provided services now serve about 35 percent of all 4-year-olds in the United States.¹³ Growing attention to the developmental benefits of high-quality childcare also encourages private providers for 3- and 4-year-olds to describe their services as preschool rather than simply childcare. As a result, some of the compositional changes we have described may simply reflect changes in self-reporting.

Labor economists examining the paid early childcare and education workforce often use several data sources. These include the NSECE surveys, establishment-level data on industry and occupation, and household surveys, such as the CPS and the ACS. In his recent comprehensive review, Arizona State University professor Chris Herbst defines childcare and early education occupations as childcare workers and preschool or kindergarten teachers. He also includes three other smaller occupations (special education teachers, other teachers and instructors, and teaching assistants) among those reporting employment in child daycare services.¹⁴ This definition excludes both childcare workers in private household services and childcare workers and preschool or kindergarten teachers employed in the elementary and secondary education industry.

Herbst notes the significance of the “home-based care” provided by small family daycare businesses and the “private household care” provided by paid nannies, friends, and relatives in children’s own homes. He reports an estimate of about 3.8 million home-based or private household workers based on a 2016 NSECE survey, compared with about 1 million center-based teachers in 2013–14.¹⁵ He also notes that about 70 percent of these home-based or private household workers were classified as “unlisted and unpaid,” a finding that emphasizes the quantitative significance of what economists might think of as the “informal sector.” About 30 percent of workers in this informal category were paid—totaling over a million workers, or about the same number as those working in childcare centers.

More attention has been devoted to the expansion of formal care and early education over the last decades than to changes in the supply of “home-based” care, partly because the latter have proved more difficult to accurately measure.¹⁶ In one effort to overcome this difficulty, Chris Herbst measures the number of people employed in family daycare by filtering occupation and industry data for the “self-employed” status that proprietors of small businesses report. This is a useful proxy because it captures more individuals in “unlisted” businesses. However, it excludes those employed as helpers in family daycare businesses, who are implicitly assigned to the “center-based” workforce. Additionally, as explained later, some small family daycare business operators may classify their industry as private household services.

Taken together, the definitional issues outlined above have implications for estimates of both the overall supply and the composition of paid home-based childcare services. Substantial declines in the number of family daycare businesses have been widely reported.¹⁷ These businesses were particularly hard hit by the end of federal stabilization funding that was initiated in 2020 during the COVID-19 pandemic.¹⁸ In addition, the expansion of state-funded pre-K programs may have unintentionally crowded out private care and preschool businesses by shifting 4-year-olds into public preschool programs.¹⁹ This shift increased the proportion of younger children, who typically require greater staffing, increasing the costs for private providers. Regulatory pressure for higher quality care services may also have reduced affordability for low-income families by increasing provider costs.²⁰ Relatively high-income families, on the other hand, were well positioned to use other paid home-based services—private household workers, such as nannies and babysitters.

Changes in the composition of the paid early childcare and education workforce

Analysis of data from the ACS between 2000 and 2023 reveals substantial changes in the composition of the childcare and education workforce relevant to both the costs and the quality of services.²¹ We document shifts in employment of childcare occupations across three industries (child daycare services, elementary and secondary education, and private household services), changes in occupational structure within the child daycare services industry, and trends in both self-employment and type of employer by both industry and occupation. Restricting our attention to employed adults ages 18 to 64, we show how the personal characteristics and earnings of different components of the childcare and early education employment have changed over time. We present data based on 5-year intervals between 2000 and 2015, omit data for 2020 due to COVID-19 pandemic disruptions (the ACS experienced sampling and response issues during that year), and present annual data for 2021–23 to document more recent shifts.

Changes in the industrial composition of two major occupations

While the precise distinction between childcare worker and preschool teacher remains blurry, childcare workers are more likely than preschool teachers to care for young children outside of center-based preschools. From 2000 to 2023, the industrial composition of the childcare worker occupational category changed dramatically. (See chart 1.) The number of people reporting this occupation in the child daycare services industry declined 46.3 percent, from 928,899 to 498,739, while the number in private household services increased about 72.0 percent, from 109,093 to 187,619 (though down from a peak of 225,630 in 2015). Over this same period, trends in the overall number of childcare workers across all industries were far less pronounced, and the overall number in the occupation declined by about 26.0 percent.

These shifts in industry distribution greatly reduced the relative importance of employment in the child daycare services industry. By 2023, only 51.1 percent of all those reporting a childcare occupation were employed in this industry, down from 70.1 percent in 2000. By contrast, the percentage of those reporting the same occupation in private household services increased from 8.2 percent to 19.2 percent. (See chart 2.) In other words, as a result of these trends, the group of workers variously described as “nannies” or “babysitters” grew to almost a fifth of all those reporting a childcare occupation from 2000 to 2023, despite likely undercounting undocumented immigrants or others working “under the table.”²²

The industrial composition of the preschool and kindergarten teacher occupation has also shifted substantially since 2000. Specifically, the number of people reporting this occupation in the elementary and secondary education industry increased from 89,753 in 2000 to 248,031 in 2023, a 176.3-percent increase, while the child daycare services industry only grew 71.6 percent. (See chart 3.) As a result, the percentage of preschool and kindergarten teachers who work in the elementary and secondary education industry increased from 21.0 percent to 30.0 percent. 

The Census classifications used in the ACS combine preschool and kindergarten, so it is impossible to separate out the preschool teachers.²³ However, enrollment in public kindergartens has remained fairly constant since 2010, with the exception of a pandemic-related dip in 2020.²⁴ Taking 2010 as a base, the percentage changes are quite similar.

Changes in occupational composition within industries

Since considerable empirical attention has focused on employment in the child daycare services industry alone, changes in its occupational structure warrant examination. In 2000, childcare workers represented 59.9 percent of all those in the industry; by 2023, their representation had dwindled to about 33.6 percent. As these trends suggest, the representation of preschool and kindergarten teachers in the industry increased over the period, from 20.6 percent to 37.0 percent. (See chart 4.) Managers, teachers who are not otherwise classified, and other occupations also increased their share in the industry.

Trends within the elementary and secondary education industry were less notable. Preschool and kindergarten teachers, despite their growth over time, represented about 2.6 percent of employment in that relatively large industry, even in 2023. Trends in the occupational structure of the private household services industry, on the other hand, show that childcare workers increased their share of the industry. In 2000, childcare workers represented only 20.0 percent of total employees in the industry; by 2023, their representation had grown to about 31.0 percent.

Changes in self-employment and sector of employment

Trends in both self-employment and the sector of employment (for-profit, nonprofit, or public) among paid early care and education workers also show noteworthy changes over the period 2000 to 2023. As noted above, the Census classifications utilized by the ACS do not explicitly distinguish small daycare businesses predominantly based in a provider’s home from larger center-based businesses. Since most smaller businesses are operated by individuals reporting themselves as self-employed in the child daycare services industry, the self-employment variable can serve as a proxy for some of the paid childcare workers in “family daycare businesses.” While this definition excludes individuals working as assistants or aides in small family daycare businesses, it nonetheless provides a useful indicator of trends over time that is consistent with reports of the contraction of family daycare businesses.²⁵ 

Within the child daycare services industry, the most prominent trend in sector of employment is a steady increase in the percentage employed by for-profit firms (from 41.0 to 53.3 percent) and a concomitant decline in the percentage of the workers in the child daycare service industry who are self-employed (from 32.1 percent to 15.0 percent) between 2000 and 2023. (See chart 5.) 

The percentage shares of both nonprofit and public employment held steady. However, as noted above, the child daycare services industry does not capture the large number of childcare workers in private household services or the preschool teachers in elementary and secondary education, virtually none of whom are employed by for-profit firms.

A revised estimate of the paid early care and education workforce in 2023

The assessment of changes in two occupations in three industries allows us to approximate the size of the paid early childcare and education labor force across all industries in 2023. As noted above, the NSECE estimates exclude kindergarten, focusing on care for children under the age of 5. In the authors’ view, the expansion of preschool services for 3- and 4-year-olds in public schools makes this exclusion arbitrary, especially since preschool and kindergarten teachers are grouped together in the standard Census occupational categories.

In 2023, 976,673 workers across all industries reported their occupation as childcare worker, and 825,436 workers across all industries reported their occupation under the rubric of preschool and kindergarten teacher, for a total of 1,802,109, a number 3.6 times greater than the total number of those working in the child daycare services industry in that year, regardless of occupation (498,739). This estimate is close to the 2022 estimate (1,776,300) formed by the National Center for the Study of the Early Childhood Workforce, using slightly different definitions.²⁶ However, it is considerably lower than estimates based on the latest NSECE survey of 2019, which estimated this workforce at about 2.2 million, possibly because it includes those providing as few as 5 hours per week on a regular basis. As the National Center for the Study of the Early Childhood Workforce notes, differences in methodology between the NSECE and the ACS mean that the data cannot be directly compared.²⁷              

We can compare our estimates with those from the ACS based on Chris Herbst’s definition. The most notable difference is that he excludes preschool and kindergarten teachers employed in the elementary and secondary education industry.²⁸ Application of his definition yields an estimated decline in the paid childcare and early education workforce of 7.1 percent between 2000 and 2023. Using our definition, this workforce increased by 3.1 percent in the same period.

Characteristics and earnings of workers in different institutional settings

Changes in the composition and size of the early childcare and education workforce have implications for employees and consumers. Differences across occupations and industries in median annual earnings and demographic characteristics invite close consideration because these have likely affected both the cost and the quality of services provided.

Comparing childcare workers and teachers in child daycare services

The average characteristics of workers in the child daycare services industry with an occupation of childcare worker rather than an occupation of teacher differed substantially in 2000 and in 2023. (See table 1.) In 2000, 28.3 percent of preschool or kindergarten teachers had college degrees, compared with 8.6 percent of childcare workers; 4.5 percent of teachers lacked high school degrees, compared with 19.2 percent of childcare workers. By 2023, these differences were somewhat attenuated but still pronounced: about 32.4 percent of preschool or kindergarten teachers had a college degree or higher, compared with 16.8 percent of childcare workers. Only 3.3 percent of teachers lacked a high school degree, compared with about 11.1 percent of childcare workers.

Preschool or kindergarten teachers were more likely than childcare workers to be White non-Hispanic, and born in the United States than childcare workers in both 2000 and 2023. In 2000, 73.2 percent of teachers reported as White and non-Hispanic, compared with 67.0 percent of childcare workers, and 92.9 percent of teachers reported as being born in the United States, compared with 86.6 percent of childcare workers. By 2023, overall proportions of those who were White non-Hispanic, and born in the United States were lower, but disparities remained: 56.7 percent of teachers reported as White and non-Hispanic compared with 45.5 percent of childcare workers, while 84.7 percent of teachers reported as being born in the United States, compared with 76.5 percent of childcare workers. These trends reflect broader demographic shifts in child daycare services over the past two decades, as both occupations have become more racially and ethnically diverse while also drawing more from larger immigrant populations.

Both preschool and kindergarten teachers and childcare workers were near the bottom of the earnings distribution for all workers in both 2000 and in 2023, but the median earnings for preschool and kindergarten teachers were consistently higher than those of childcare workers. Median earnings for teachers were $21,657 in 2000 compared with $14,124 for childcare workers. The earnings gap was similar in 2023, with teachers earning a median of $25,753 compared with $18,542 for childcare workers. Notably, in 2000, childcare workers earned substantially less despite working a similar number of weeks per year (42.1 for childcare workers compared with 42.3 for teachers) and considerably more hours per week (37.6 for childcare workers compared with 33.5 for teachers). By 2023, this pattern shifted. Hours worked per week converged to nearly identical levels (34.7 for childcare workers compared with 35.3 for teachers). At the same time, teachers worked more weeks annually (46.4 for teachers compared with 44.8 for childcare workers), possibly contributing to the persistent earnings gap.

Comparing preschool and kindergarten teachers across two industries

The characteristics of preschool and kindergarten teachers in the predominately large private industry of child daycare services differ substantially from those in the largely public industry of elementary and secondary education, with these disparities persisting across time. Table 2 shows that, in 2000, 67.6 percent of teachers in elementary and secondary education held college degrees, compared with 28.3 percent in child daycare services. By 2023, 82.0 percent of teachers in elementary and secondary education had attained a bachelor’s degree or higher, compared with just 32.4 percent in child daycare services. These educational differences help explain substantial earnings disparities between the two sectors. In 2023, teachers in elementary and secondary education earned a median annual income of $49,446, compared with $25,753 for those in child daycare services. The earnings gap was smaller but comparable in 2000, with elementary and secondary education teachers earning $41,431, compared with $21,657 in child daycare services.

Here, again, differences in annual weeks and hours worked are relevant, with those in the elementary and secondary education industry working more weeks on average per year (48.2 compared with 46.4) and more hours per week (40.1 compared with 35.3) in 2023. The number of weeks worked was quite similar in 2000, when elementary and secondary education teachers worked 42.7 weeks compared with 42.3 weeks for child daycare services teachers; elementary and secondary education teachers worked about 3.2 more hours per week. However, lower overall average annual work hours could have been either a cause or a consequence of lower wages. Rates of return to education are far higher in elementary and secondary education, especially among those with higher credentials.

The authors’ calculations (not shown here) indicate that White and non-Hispanic preschool or kindergarten teachers with some college but no bachelor’s degree enjoyed a modest 4.3-percent earnings premium in primary and secondary education in 2023—a premium that disappears for those with only a high school diploma. Those with a bachelor’s degree or higher enjoyed an annual earnings premium of 59.5 percent ($46,356, compared with others’ $29,050). Those with a higher-level degree, such as a master’s, earned about 136.0 percent more in primary and secondary education than those in child daycare services.

The low average level of educational credentials certainly helps explain lower relative pay in child daycare services.²⁹ However, it also seems likely that relatively few employees in child daycare services have a college degree or higher because the returns to such a degree are far lower than in elementary and secondary education. One possibility is that low- and middle-income families are highly sensitive to the cost of privately purchased preschool and kindergarten services, making it difficult to compete for college-educated personnel.

High-income families are more likely than others to rely on childcare services provided by private household workers, and care provided by “nannies” is generally considered the highest quality and the most expensive. The 2024 NSECE found that 27.0 percent of parents with incomes at or above 120.0 percent of their area’s median income employed a nanny for children under age 3, compared with only 3.0 percent of low-income parents.³⁰ As indicated in table 3, the characteristics of childcare workers differed substantially between those employed in private household services and those employed in child daycare services in both 2000 and in 2023—but the educational attainment of those in private household services increased to a surprising degree. In 2000, 9.4 percent of private household services workers had college degrees, compared with 8.6 percent in child daycare services. By 2023, 16.8 percent of workers in child daycare services had a college degree or higher, but 27.9 percent of those reporting a childcare occupation in private household services had a college degree or higher. These trends reflect a general rise in educational attainment over the period: in 2000, about 31.0 percent of U.S. employees ages 25 and older had at least a bachelor’s degree but, by 2023, this percentage had increased to 45.0 percent.³¹

In 2000, the percentage of White and non-Hispanic childcare workers in child daycare services (67.0 percent) was higher than in private household services (57.8 percent). However, by 2023, the percentages were quite similar—and both were below a majority level (45.5 percent and 48.7 percent, respectively). While the annual earnings of those employed in private household services were slightly lower than those of childcare workers in the same industry in 2023, many of them received nonmonetary compensation in the form of food or lodging, and they also worked slightly fewer weeks per year and hours per week.

Conclusion

Despite measurement limitations, this assessment of trends in employment in childcare and early education in the United States yields several substantive conclusions. Employment in the child daycare services industry provides a poor proxy for this labor force, since about 19.0 percent of those in the childcare occupation were located in the private household services industry and about 12.0 percent in the elementary and secondary education industry in 2023. Moreover, about 30.0 percent of preschool and kindergarten teachers were located in elementary and secondary education, largely as a result of state-level expansion of preschool programs.

These patterns highlight the role of institutional segmentation of paid childcare services, including trade-offs between educational quality and affordability and differences across household income groups. The growth of for-profit center-based childcare provision has been accompanied by increases in childcare services located in private household services, patterns that are more common among higher income households. The recent expansion of state-funded universal pre-kindergarten for 4-year-olds may partially offset these trends.

The overall decline in self-employment as a share of employment in child daycare services, alongside the rise in employment share in private household services, is noteworthy. Several researchers note that family daycare businesses provide more affordable services than childcare centers, are more economically vulnerable to the business cycle, and are less able to meet stringent regulatory standards.³² Their decline may have been partially buffered by the rise in self-employed private household services through digital platforms, which may be less accessible to low-income than to high-income and more digitally connected households.

Survey design and coordination could be substantially improved. While some surveys capture unpaid or low-paid relatives or friends, we know little about the characteristics of workers who provide childcare in unlicensed family daycare businesses, especially those that are also “unlisted” by state agencies, as they are rarely included in surveys of formal economic establishments. Many are classified as self-employed, with those who are wage earners assumed to be part of the center-based workforce.³³ It is difficult to assess the accuracy of this assumption. It also seems possible that some respondents who describe themselves as childcare workers in the private household services industry are self-employed family daycare providers, because they are, after all, providing services in their own private households.

Clearer criteria are needed to distinguish childcare workers from preschool and kindergarten teachers. As noted over 10 years ago, one option would be to introduce distinctions based on the typical age range of children being cared for, such as infants (under 1 year), toddlers (between 1- and 3-years-old) and preschoolers (ages 4 and 5).³⁴ Grouping preschool and kindergarten teachers in a single category seems problematic, since kindergartens in most states are more fully integrated into the public education system.

In this research, we encountered measurement difficulties because of multiple occupations, multiple industries, and incomplete information on informally paid providers, and these survey limitations make it difficult to draw definitive conclusions, but the descriptive analysis suggests that the supply of childcare services may have declined for many low-income families relying on small family daycare, while access grows for those who can afford private center-based preschool or private household workers.