An economic analysis of school-age child care in Tennessee.

Abstract

Hypothesis 1 tested for the financial and economic feasibility of the school-administered school-age child care (SSACC) model. The null hypothesis was that the stream of costs associated with running the ESP-SSACC model programs exceeded the benefits stream. Hypothesis 2 tested for any statistical difference between the mean weekly revenues and the mean weekly enrollments of the two groups. In the case of hypothesis 1, the null hypothesis was rejected in favor of the alternative hypothesis that the stream of costs was less than the stream of benefits. In the case of hypothesis 2, the test results did not detect any significant statistical difference between the mean weekly revenues of the for-profit and the not-for-profit school-age programs, but did find a statistical difference between their weekly mean enrollments.

Conclusions. (1) The success of the SSACC Extended School Program model appeared to depend on its linkage to the city school system which absorbed most of the fixed costs of the program and the support of powerful constituents in the respective local communities where these programs exist. (2) If the SSACC programs themselves had to absorb the fixed costs, their financial and economic feasibility might result in lack of accessibility to all income groups. (3) If the SSACC programs could continue to be financially independent from the public budget well into the future, it could guarantee the SSACC model as the 21st Century model for early childhood intervention. (4) Strong exogenous factors exist to guarantee each model SACC some market presence in addition to the market share guaranteed by the differentiated nature of each model's products. (5) While there appeared to be no significant statistical difference between the average weekly revenues of the for-profit and the not-for-profit school-age programs, their mean weekly enrollments appeared to be significantly different. The explanation for the statistical difference in enrollment could be that revenue is a weighted variable while enrollment is not. (6) There was no evidence that increases in ESP-SSACC enrollments were obtained at the expense of the for-profit or the other not-for-profit SACC models. (7) While the school-age child care market appeared to be a monopolistically competitive model, it tended to exhibit properties closer to a competitive market model than to a monopoly. (Abstract shortened by UMI.).