Impact of 2021 Investments in Early Childhood Care and Education: Investments Provided Temporary Relief; Low Wages Persist

In June 2021, the Minnesota Legislature appropriated significant investments in child care, using $537 million in Child Care and Development Funds from the federal American Rescue Plan Act (ARP). Investments included: $304 million in direct payments to providers through Child Care Stabilization Grants; $22.5 million for Child Care Facility Grants for facility improvements, minor renovations, and related equipment and services; and $1 million for the Retaining Early Educators through Attaining Incentives Now (REETAIN) program. This money was temporary and provided much needed relief, as well as a unique opportunity to try novel approaches to solving a variety of challenges that exist in early education. The goal of this project is to understand the impact of ARP funds on increasing wages and retention of the early childhood education workforce to inform future investments. This brief explores the initial impact of that federal funding on Minnesota's child care industry. Ongoing analysis will further determine the impacts on the early childhood workforce; an in-depth report will be forthcoming in 2024.