Child care and early education workers are some of the lowest paid workers nationwide. They have higher poverty rates than workers from other industries and often rely on public assistance or take a second job to help make ends meet. Low pay also makes it challenging to recruit and keep qualified individuals in the field, both of which affect the quality and stability of care provided to children and the access to child care that is available for working parents.

Although they represent only about 10 percent of paid, home-based child care settings, there are over 90,000 licensed Family Child Care (FCC) homes in the United States, serving nearly 800,000 children under age 13. FCC homes operate within a family residence and provide care for at least one child not related to the head of the household. FCC homes serve about eight children on average, and about 40 percent have paid assistants to help with care. The number of licensed FCC homes has fallen over the past 20 years, and these providers represent an important part of the child care sector, particularly for families with low incomes, those with irregular or unpredictable work schedules, and those living in rural areas that typically do not have many child care options.

Beyond low pay, these providers face additional challenges—they can feel isolated, since many do not have additional staff members, and they may also feel the pressure of managing a small business. The owners of these small businesses can find it difficult to gain access to benefits that are typically offered to salaried employees. Few providers report having retirement plans, for example, or paid time off. Surveys indicate that most providers have health insurance, but it is typically through state Affordable Care Act Marketplace plans, Medicaid, or through a spouse. One study found that over 60 percent of former providers listed economic reasons, including low pay and lack of benefits, as an explanation for leaving the FCC field.

To better support FCC homes in Colorado, the Colorado Department of Early Childhood launched the Family Child Care Home Benefits Pilot that offered selected FCC providers additional funding to help them gain access to benefits. The pilot program was aimed at FCC homes in Colorado that serve children from birth through age 5. A study of the pilot program was conducted as part of the Building and Sustaining the Child Care and Early Education Workforce project.

This brief discusses findings from the study, which started in July 2023 and lasted for two years. It presents the characteristics of participating FCC homes, providers, and assistants, as well as providers’ and assistants’ experiences with the pilot program.