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Understanding the Cost of Quality Child Care in New Mexico: A Cost Estimation Model to Inform Subsidy Rate Setting

June 1, 2021

New Mexico, along with every other state, currently relies on the market-rate survey approach to set rates paid by public funding for child care subsidies under federal Child Care Development Block Grants. Under a market survey approach, child care rates paid by public funding are based on what parents can afford to pay for child care, not necessarily related to the actual cost of delivering quality care. This paper outlines a cost-estimation model, informed by cost study data, that allows New Mexico’s early childhood leaders to better understand the actual cost of providing early care and education services in New Mexico.

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