Jobs in the Balance: The Two-Year Labor Market Impacts of Washington, DC’s Early Childhood Educator Pay Equity Fund
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Key Findings
- The Early Childhood Educator Pay Equity Fund (PEF) had a statistically significant positive impact on the number of child care and early childhood education (CCEE) educators in Washington, DC. We estimated that by the third quarter of 2023, the PEF had increased CCEE employment in Washington, DC, by 219 educators, or about 7 percent relative to estimated levels in the absence of the PEF.
- The impact of the PEF on the number of CCEE establishments was not statistically significant, suggesting the observed increase in the CCEE workforce was driven by the PEF’s positive impacts on staffing in existing establishments.
- The PEF did not have an impact on average weekly wages for CCEE educators. This finding is consistent with the expectation that PEF payments delivered outside of employer payrolls would not be captured in the study data.
- The positive impacts of the PEF on CCEE employment levels in the first two years of the program suggest that substantial wage supplements can effectively support the hiring and retention of educators in a setting as large and diverse as Washington, DC.
This report evaluates the labor market impacts of Washington, DC’s Early Childhood Educator Pay Equity Fund (PEF), a pioneering initiative to address pay disparities between child care and early childhood education (CCEE) educators and K–12 teachers. In its first two years, the PEF has delivered supplement payments ranging from $10,000 to $14,000 per year to more than 4,000 CCEE educators in licensed settings. Using data from the Quarterly Census of Employment and Wages and a multiple-outcome synthetic control method, we found that after two years, the PEF had increased CCEE employment in Washington, DC by 219 educators, or about 7 percent relative to employment estimates in the absence of the PEF. We did not estimate significant impacts on the number of CCEE establishments, suggesting the PEF enabled existing establishments to increase staffing amidst documented staffing shortages in the sector. Near-zero effects on employer-reported wages were expected in the first two years of the program during which payments were disbursed directly to educators. We assess the robustness of these findings to several changes in the study design and technical approach.
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