Investing in Pay Parity Program Pays Off for Early Childhood Educators in DC

A major public investment to boost pay for child care and early education (CCEE) educators in Washington, DC, has strengthened staff recruitment and retainment and produced benefits that exceed costs, according to new research from Mathematica.

The Early Childhood Educator Pay Equity Fund (PEF) is a pioneering initiative designed to address pay disparities between CCEE educators and K–12 teachers in Washington, DC. Since 2022, the PEF has provided educators with pay supplements of up to $14,000 per year, bringing their pay up to the level of K–12 teachers. In 2023, the PEF also included subsidized health care.

Mathematica is conducting the Early Childhood Educator Pay Equity Fund Impact and Cost Effectiveness (PEF Impact) Study, an ongoing evaluation of the fund’s cost effectiveness and impact on the labor market. A new report by Owen Schochet, a researcher at Mathematica, and Clive Belfield, an economics professor at Queens College, City University of New York (CUNY) and senior fellow and affiliated economist at the Center for Benefit-Cost Studies of Education, shared findings from a benefit-cost analysis to determine the economic value of the PEF.

“The one-year social return on investment in the PEF can be conservatively estimated to be 23 percent—and it might be even higher. Although the PEF represents a substantial investment of public resources, our research concludes that the economic value of its many benefits for educators, their employers, and the families that rely on early childhood care exceed its costs by a considerable margin.”

Owen Schochet, benefit-cost analysis report co-author

Key findings

The full annual cost of the PEF is just above $54 million, and it generates annual benefits valued at roughly $67 million. The benefits of the PEF exceed the costs by $12.5 million. The one-year return on investment is 23 percent, meaning that every dollar invested in the PEF returns $1.23 to society. These gains come from benefits to CCEE educators, the facilities that employ them, and the children and families they serve. Benefits for CCEE educators include lower absenteeism, increased productivity, more work experience, welfare savings, and reduced health expenditures and medical debt. Employers benefit from reduced staff turnover, and families benefit from increased access to and improvements in CCEE service quality.

Research panel in DC

With support from the Bezos Family Foundation, Mathematica, DC Action, and Under 3 DC convened a research panel on Tuesday, November 19, to explore these latest findings. Featured speakers and topics of discussion included the following:

• Ronnell Nathaniel, vice president of programs at Educare DC, highlighted why Educare participates in the PEF and the impact she has seen on the facility’s ability to recruit and retain a strong workforce.
• Sharnetta Meyers, lead teacher at Educare DC, shared her personal experience with the PEF.
• Sia Barbara Kamara, a DC Early Learning Collaborative board member, spoke about Washington, DC’s, history of innovative early childhood education efforts.
• Audrey Kasselman, senior policy analyst for early childhood at DC Action, discussed the importance of early childhood education in child development and the role of the PEF in supporting that system.
• Schochet and Belfield presented findings on the PEF’s impact on the labor market and the program’s one-year return on investment.
• Eboni-Rose Thompson, Ward 7 DC State Board of Education Representative, shared her perspective on the importance of investing in early childhood education.

“As an administrator in early childhood education, I can say with confidence that the Pay Equity Fund has been nothing short of transformative. The impact has been profound: we've seen a significant boost in teacher retention, recruitment, and overall morale. Before the Pay Equity Fund, we faced a stark reality—three of our classrooms were closed due to the nationwide teacher shortage exacerbated by the pandemic. Today, thanks to the Pay Equity Fund, all of our classrooms are open, and an additional 40 children are now receiving the high-quality early education they deserve. The difference is clear.”

Ronnell Nathaniel, Educare DC

“I feel incredibly fortunate to be a teacher in the District of Columbia, where early childhood educators are compensated as the skilled professionals we are—alongside our colleagues in K-12 education. This is not just a win for teachers. It’s a win for our children, who deserve the best educators. It’s a win for our communities, who will benefit from the investments we make in the next generation.”

Sharnetta Meyers, Educare DC

“The District has always been a pioneer in early childhood education. In 1964, we became a pilot test site for the National Head Start program, and in 1972, we were one of the first jurisdictions in the country to offer Pre-K for four-year-old children in a public school setting…One thing we’ve learned along the way is that children cannot be prepared for educational success without highly skilled and fairly compensated teachers.”

Sia Barbara Kamara, DC Early Learning Collaborative

“One thing that is clear is that this unprecedented investment strengthens the foundation of early childhood education—a critical period that, as research shows time and time again, shapes children’s lifelong health, wellness, academic, and economic outcomes. The Pay Equity Fund enables a more consistent, high-quality child care system by supporting a stable, skilled workforce—which is absolutely essential for children’s development and success.”

Audrey Kasselman, DC Action

“We find that the main beneficiaries [of the Pay Equity Fund] are families. That is, the benefits of the program to families—increased access to care and improved quality of care—account for a large share of the total economic benefits of the program.”

Clive Belfield, benefit-cost analysis report co-author

Access a recording of the panel, the full benefit-cost analysis report, and a summary report.

A novel two-year labor market impact study conducted before this benefit-cost analysis showed that the PEF had a statistically significant positive impact on the number of CCEE educators in Washington, DC. Access the full impact report and a fact sheet summarizing its findings.

The Bezos Family Foundation and DC Action are supporting Mathematica’s outcome and benefit-cost evaluations of the Early Childhood Educator PEF to contribute to the growing evidence base on the PEF’s impacts on the CCEE sector and to inform policy and funding discussions. For more on these evaluations, visit Mathematica’s website.