DC’s early childhood educator compensation program provides funding to child care providers to pay their educators according to a minimum salary schedule. This brief examines how funding from this voluntary program supports child care businesses’ financial health and influences the family tuition they charge. 

Why This Matters

Child care businesses often incur high costs despite high average tuitions and low wages for the early childhood workforce. DC’s investment in early educator compensation has been documented to improve workforce retention and well-being, but less is known about how its program supports businesses’ finances and the amounts families pay for care. 

What We Found

Based on a late 2025 web survey, we found the following:

• Child care providers reported that the compensation program benefits their businesses’ overall financial health, although some providers remain less financially stable.
• A majority of providers reported no increase in family tuition in the past year; however, among those that did, many indicated that the compensation program played some role in this change.
• Almost half of providers reported that without funding from the compensation program, they would have to raise tuition.
• Providers overwhelmingly viewed the compensation program as “good for DC families,” in addition to helping the early childhood workforce.

How We Did It

Urban Institute is undertaking a multiyear analysis of DC’s early childhood educator compensation program in licensed child care facilities. For this analysis of fiscal year 2025 implementation, we administered voluntary web surveys in October–December 2025 and analyzed responses from 74 child care center directors and 22 child care home owners and operators participating in the compensation program.