Jobs in the Balance: The Two-Year Labor Market Impacts of Washington, DC’s Early Childhood Educator Pay Equity Fund (PEF)
Evidence | Publications

Jobs in the Balance: The Two-Year Labor Market Impacts of Washington, DC’s Early Childhood Educator Pay Equity Fund (PEF)

Published: May 28, 2024

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Associated Project

Washington, DC Early Childhood Educator Pay Equity Fund Impact and Cost Effectiveness Study

Time frame: 2022 – 2026

Prepared for:

Bezos Family Foundation

Klingenstein Philanthropies

DC Action

Clients

Bezos Family Foundation

Authors

Owen Schochet

Key Findings

  • The PEF is an initiative to address the pay gap between child care and early childhood education (CCEE) educators and K-12 teachers, had a statistically significant positive impact on the number 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 program.
  • 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 program’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 program-related 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 its first two years suggest that substantial wage supplements can effectively support the hiring and retention of educators in a setting as large and complex as Washington, DC.

This report evaluates the labor market impacts of the PEF, a pioneering Washington, DC initiative to address the pay gap between 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 program. We did not estimate significant impacts on the number of CCEE establishments, suggesting the program 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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