Vermont lawmakers are considering a bill, S. 206, to add new licensing requirements for early childhood educators with the supposed intention of “professionalizing the workforce” to improve quality childcare in the state. But instead of expanding access to quality childcare, evidence suggests severe adverse effects, as stricter licensing tends to reduce the number of providers, raise prices, and limit options for families, especially those in lower-income communities.
Much of Vermont is already considered a childcare desert, where demand far exceeds available slots, forcing parents to delay returning to work, reduce hours, or leave jobs altogether, affecting both household incomes and the broader economy. In a functioning open market, this level of unmet demand would naturally encourage more providers to enter and expand childcare services. However, Vermont’s heavy regulatory environment has made it difficult to operate a profitable childcare business, discouraging new providers from entering the market. If barriers are increased, fewer providers will enter, and some existing providers may be forced out, further reducing available care at a time when Vermont families already struggle to find it. The research on childcare regulation is clear: regulations, often framed as quality improvements, come with real tradeoffs. A study published in the Journal of Regulatory Economics finds that increasing regulatory requirements significantly reduces the number of center-based childcare options, especially in lower-income areas.
Vermont currently ranks 50th in the nation for childcare regulatory freedom, meaning it has the most restrictive system in the country, with a regulatory freedom score of 1.31 (Idaho, ranked #1, scored an 8.17). Research by economists Diana Thomas and Devon Gorry shows that each one-point increase in regulatory freedom is associated with a $774 annual decrease in infant care costs, or about a 5 percent reduction per point, with differences between states with different regulatory burdens exceeding $5,600 per year. It should come as no surprise then that Childcare is one of the largest expenses facing Vermont families. Center-based infant care ranges from roughly $15,500 to nearly $19,000 per year, often exceeding one-quarter of household income. Family-based or home childcare providers charge about 24% less than centers, representing the most accessible option for many families. Ironically, these are the very providers most affected by S. 206. Requirements such as 120 hours of training (while security guards typically complete about 40 hours of training, and emergency medical responders require between 60 and 90 hours) for the lowest-tier provider license and a bachelor’s degree for higher tiers, along with application and renewal fees, make it practically and financially impossible for many small or home-based providers to continue operating. If this is implemented, we risk losing the most affordable childcare options for Vermont families. The fact that S. 206 only targets private childcare options also raises questions about whether the policy is truly focused on quality care, or if instead it represents another layer of top-down regulation driving families away from education choice and towards state-sponsored options.
If the goal is to expand access to affordable childcare, S. 206 is not the answer. The evidence clearly points towards reducing barriers to entry and encouraging more providers to enter the market. That means allowing small and home-based providers, as well as center-based providers, to operate more easily by limiting excessive training mandates or education requirements, encouraging competition, and giving families more choices. Parents understand their children’s needs better than the government. Expanding supply and empowering families to choose the care that works best for them is the most effective way to improve both access and affordability.
