This brief highlights principles and related activities as state agencies, stakeholders, and policymakers consider how to develop a comprehensive strategy for allocating American Rescue Plan Act (ARPA) funds related to childcare relief. Five key principles were identified.
- Maintain and increase the supply of high-quality childcare, particularly in underserved areas and for families with low incomes or high needs.
- Boost low-income parents’ ability to work and provide continuity of care for children.
- Stabilize the childcare workforce and support program quality and child development.
- Make use of short-term financial resources for long-term assets.
- Align Child Care and Development Block Grant (CCDBG) and child care stabilization funds (CCSF) funding with other pandemic relief efforts and federal resources.
This brief was produced by a Federal Reserve System work group to provide context on childcare system challenges and considerations for addressing the needs of working families with young children. It builds on Briefing on Childcare Funding and Policy Considerations in Response to COVID-19, published in August 2020. That document provides background on industry structure and the pandemic’s early impact on the childcare system. It identifies principles for providing financial assistance to the childcare sector based on economic research into the high returns from early care and education.