New cost estimation tool examines cost of providing quality child care

by | Jun 13, 2024

cost model for child care

The Nebraska Child Care Cost Model, a new tool developed in collaboration with First Five Nebraska and Prenatal to Five Fiscal Strategies (P5FS), examines how the expense of delivering high-quality child care services relates to the actual revenue earned by providers. The tool is a crucial step toward creating a sustainable infrastructure that supports the economic viability of early childhood programs while keeping costs in check for Nebraska families.

Available at, the cost model is intended to help policymakers, advocates and decision makers use data to shape policies that address challenges related to subsidy reimbursement, program quality and professional development of the early childhood workforce. Users can experiment with a variety of scenarios to explore how regulatory and economic conditions affect financial sustainability.

The Nebraska Child Care Cost Model was made possible through funding from Nebraska’s Preschool Development Grant in conjunction with the Shared Leadership and Financing Task Force. First Five Nebraska engaged P5FS to develop the cost model. Led by early childhood finance experts Jeanna Capito and Simon Workman, P5FS has developed cost estimation models for several states and communities.

Customize by type of care, location & other variables
The tool offers many customizations related to cost of care questions. It includes options for child care centers (CCCs) and family child care homes (FCCHs) and allows users to enter inputs such as geographical location, salary/benefits, program size and revenue/income sources. The model then calculates how these inputs impact the results, such as personnel expenses and gaps between market price and the true cost of care. The cost model calculations are based on current data and regulations and will be updated on an ongoing basis.

In October 2023, the Nebraska Legislature’s Health and Human Services Committee held an interim study hearing, LR151, to examine how the Nebraska Child Care Cost could be used to help determine the true costs of providing child care. During the study, introduced by State Senator Wendy DeBoer (District 10), policymakers heard from providers who supported using the Cost Model to set child care subsidy reimbursement rates.

“Our hope is that the Cost Model can provide lawmakers with a clearer picture on how we can work together toward an equitable and economically viable child care industry for all Nebraskans,” said Dr, Katie Bass, FFN data and policy research advisor.

Check out the Nebraska Child Care Cost Model at

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