The day care industry is a continuum from personal parental care to large, regulated institutions.

The vast majority of childcare is still performed by the parents, in house nanny or through informal arrangements with relatives, neighbors or friends. For example, in Canada, among two parent families with at least one working parent, 62% of parents handle the childcare themselves, 32% have other in-home care (nannies, relatives, neighbors or friends) and only 6.5% use a formal day care center.

However for-profit day care corporations often exist where the market is sufficiently large or there are government subsidies. For instance, in North America, Bright Horizons Family Solutions is one of the largest such companies, with over 600 daycare centers. Similarly the Australian government’s childcare subsidy has allowed the creation of a large private-sector industry in that country. ABC Learning Centers is a publicly traded company running about 1,000 daycare centers in Australia and New Zealand and another 500 in the USA.

Another factor favoring large corporate day cares is the existence of childcare facilities in the workplace. Large corporations will not handle this employee benefits directly themselves and will seek out large corporate providers to manage their corporate daycares. Smaller, for-profit day cares operate out of a single location.

In general, the geographic limitations and the diversity in type of daycare providers make child daycare a highly fragmented industry. The largest providers own only a very small share of the market. This leads to frustration for parents who are attempting to find quality child daycare, with 87% of them describing the traditional search for child daycare as “difficult and frustrating

Independent studies suggest that good day care for non-infants is not harmful. Some advocate that day care is inherently inferior to parental care. In some cases, good daycare can provide different experiences than parental care does, especially when children reach two and are ready to interact with other children. Bad day care puts the child at physical, emotional and attachment risk. Higher quality care was associated with better outcomes. Children in higher quality child care had somewhat better language and cognitive development during the first 4 years of life than those in lower quality care. They were also somewhat more cooperative than those who experienced lower quality care during the first 3 years of life.

The National Institute of Health released a study in March, 2007 after following a group of children through early childhood to the 6th grade. The study found that the children who received a higher quality of child care scored higher on 5th grade vocabulary tests than the children who had attended child care of a lower quality. The study also reported that teachers found children from child care to be “disobedient”, fight more frequently, and more argumentative. The study reported the increases in both aggression and vocabulary were small. “The researchers emphasized that the childrens behavior was within the normal range and were not considered clinically disordered.”

As a matter of social policy, consistent, good daycare may ensure adequate early childhood education for children of less skilled parents. From a parental perspective, good daycare can complement good parenting.
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