The PEF is the nation’s first dedicated public funding stream designed to sustain large compensation increases across a local child care and early education sector. Launched in Washington, DC, in late 2022, the PEF initially provided fixed payments directly to eligible educators before transitioning to a facility payment model in fiscal year 2024 that incorporated minimum required salaries by educator role and qualifications into employer payrolls. The program also began providing access to subsidized health insurance in 2023.

This report estimates how the PEF affected participating center-based educators, licensed home-based providers, and center-based facilities during its first three years. The study linked population-level workforce registry records from Washington, DC, and six comparison states with PEF payment, licensing, child care subsidy, and quality-system administrative records. Using a quasi-experimental difference-in-differences design and propensity score weighting, the analysis estimated how outcomes for PEF participants would likely have changed in the absence of the program.

After two years, the PEF increased compensation in the amounts and patterns expected under the program’s design; strengthened staff attachment to their baseline facilities and facility workforce stability through retention and recruitment; and increased facility staffing primarily in existing licensed capacity, even as fewer centers remained open. It also improved staff and facility workforce qualifications, increased promotion odds within teaching positions, and may have increased facility engagement with public quality systems and the prevalence of high-quality ratings.

Together, the findings extend earlier evidence that the PEF increased sector employment by identifying the pathways through which those gains occurred. They show that large sustained public investment in child care and early education educator compensation can strengthen workforce retention, recruitment, staffing, and qualifications and underscored that effects depend on program design and broader policy context. The study also demonstrates how linked workforce registry records from multiple jurisdictions can support quasi-experimental evaluations of broadly implemented state and local child care and early education policies.