Volume 27, Number 3 (Summer) 1992
Powell, Irene and James Cosgrove. 1992. "The Quality and Cost in Early Childhood Education." Journal of Human Resources 27(3):472-484.
This paper uses a unique survey of 205 child care centers conducted by the U.S. General Accounting Office to estimate flexible-form cost functions for child care. Our model allows us to estimate the tradeoff between cost and such quality factors as the child/staff ratio, child/staff group size, and staff characteristics. The coefficient on the child/staff ratio indicates that decreasing the average child/staff ratio from, for instance, and 11 to 1 ratio to a 10 to 1 ratio, would lead to an increase in costs of roughly 3.4 percent. Staff turnover, education, and experience also had statistically significant effects on cost.
Irene Powell is a professor of economics at Grinnell College. Kames Cosgrove is a researcher in the Human Resources Division of the U.S. General Accounting Office. The authors would like to thank Mark Montgomery, Jonathan Ratner, Jack Mutti, and Timothy Schoon for their helpful comments and Deborah Eisenberg, Luann Moy, and Joan Vogel for their invaluable work in survey and data preparation.
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