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Discussion paper

Regulating for quality in childcare: the evidence base

5 Nov 2014

Regulation of childcare for the purposes of early childhood learning and development is a relatively new phenomenon. Where debates were once about whether children are better off in childcare or at home with a parent, today’s conventional wisdom, based on sometimes misguided interpretations of research, is that childcare is good for all children provided it is of sufficient quality.

• A close reading of the evidence on childcare and early childhood programs suggests that the benefits of childcare accrue most strongly to children from disadvantaged backgrounds: the effects of public, universal childcare for children from middle to high socioeconomic backgrounds are mixed.

•    The National Quality Agenda (NQA) endorsed by all states and territories in 2009 regulates childcare systems across Australia. It mandates increased minimum standards in various aspects of provision of care and a ratings system.

• ‘Quality’ in childcare is difficult to define, but for the purposes of regulation the key criteria are ‘structural quality’    inputs — staff-to-child ratios and carer qualifications. The NQF mandates substantial and costly reforms to these aspects of care.

•    This report details that the costs of these reforms have been understated and the potential benefits overstated.

Costs: There are four kinds of costs that the commissioned reports do not adequately take into account: administrative costs, impacts on supply, impacts on female labour force participation, and deadweight loss.

Benefits: There is very little evidence from Australian and international research that the childcare ‘quality’ measures regulated by the NQF improve outcomes for children.
–    Australian studies found only small positive effects of lower staff-to-child ratios for socio- emotional and behavioural outcomes—not for cognitive outcomes — and it is not clear whether the effects are enduring. Overseas studies found no effects, or effects only for younger children.
–    Australian studies mostly found no effect of higher carer qualifications on child outcomes, with the exception of one study which found improved behavioural outcomes for older children. Overseas studies mostly found no effects on child outcomes, with one exception which found improvement in children’s academic achievement.

•    In summary, there is scant evidence underpinning the NQF reforms to staff-to-child ratios and staff qualifications, bringing into question whether the cost involved represents an ‘investment’.

• The NQF reforms are likely to increase the cost of care without measurably improving quality, at the same time potentially restricting access for socioeconomically disadvantaged children who benefit from it most.

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