No retirement? Child care sector hobbled by lack of retirement benefits. Can that change? No retirement? Child care sector hobbled by lack of retirement benefits. Can that change?

New brief looks at boosting retirement as part of broader push for better child care compensation New brief looks at boosting retirement as part of broader push for better child care compensation

July 12, 2023

Northeastern University researcher Kim Lucas says child care workers have long performed “invisible labor” – the kind of work that’s foundational to the economy, even as few think about the people doing it.

But child care workers became a lot less invisible during the pandemic. Care became scarce, putting new focus on those providing it – including why they were so poorly compensated for work now valued more than ever.

Addressing the notoriously low compensation of child care workers is at the heart of a new policy brief by Lucas titled “Retirement for early educators: Challenges and possibilities.” Lucas wrote the brief during a fellowship with the Federal Reserve Bank of Boston.

The brief acknowledges that low wages tend to overshadow other drivers of the child care sector’s decades-long crisis of quality, availability, and affordability. But Lucas said exploring the lack of retirement benefits can help address the compensation problem more holistically – and potentially more effectively.

“There's a lot that goes into packaging what a good job looks like,” they said. “So, I think any type of policy solution that solves the compensation issue is going to actually be multiple solutions, and retirement benefits can and should be part of it.”

Early educator retirement benefits and programs are extremely rare

Any push to make retirement benefits more available to child care workers will start nearly from scratch. The brief indicates only 1 in 10 child care workers have such benefits, and Lucas found just two initiatives nationwide focused specifically on them. But they do matter to workers.

The brief cites a 2021 Massachusetts Association for the Education of Young Children survey that found 31% of child care workers said the lack of benefits, including retirement benefits, was one reason they considered leaving the field.

In the same survey, 36% of respondents said more benefits, including retirement benefits, would incentivize them to stay in early education.

The fact the sector is aging, along with the rest of the U.S. workforce, also elevates concerns about retirement. Workers who’ve spent decades in a physically, mentally, and emotionally challenging and important field despite little financial reward should have a graceful way to leave it, Lucas said.

“Everyone should be able to age out of their of their work in a dignified way, if that's what they're looking for,” they said.

What lessons can we take from past and current programs?

Lucas said lessons on how to do that are found in the two child care worker retirement initiatives.

A now-defunct program called C-WAGES in San Francisco allowed for wage supplements for providers, and some elected to use the flexible portion of those funds to start or match retirement accounts for employees. To Lucas, that showed the importance of flexible funding.

“It says to me, ‘Wow, when you give the sector the ability to use funds in ways you might not have thought of, they get creative, they know exactly where these funds should go,’” they said.

The other initiative – an ongoing pilot program in Coos County, New Hampshire – provides matching funds for early educators saving for specific goals, including retirement. The program is funded by a philanthropy, the Neil and Louise Tillotson Fund, and Lucas said its willingness to let those on the ground decide where the money should go is a great example.

“I think a key point there is that dedication at the outset to saying to those working directly in the field, ‘We are willing and committed to following your lead,’” they said.

Overall, Lucas’s brief lays out three pathways for enhancing early educator retirement options:

  • Third-party funding, like with flexible government resources in C-WAGES or the Tillotson Fund in New Hampshire. “Early educators and child care providers can’t self-fund,” Lucas said “Their most pressing priority is dealing with a low-wage issue.”
  • Targeted legislative action, such as bills that would expand a state’s retirement program for higher ed educators to early educators.
  • Including child care workers in retirement initiatives that benefit broader groups. An example is laws enacted or pending in several states that require most employers to provide retirement.

Lucas acknowledged it was discouraging when major pandemic-era efforts to provide more funding for early educators sputtered out. But they still see significant momentum behind addressing child care worker compensation, especially at the state and local levels.

“There's no going back,” they said. “I think there's only forward.”

Read Lucas’s brief on

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