Last spring, UC Berkeley researcher Anna Powell sat in on a Zoom call as a number of Bay Area child-care center leaders discussed, with sympathy and frustration, the difficult position their businesses were in.
In a few months, the start of the school year would also mark the first year of public transitional kindergarten (or TK) for all California 4-year-olds, completing its expansion across the state. An optional new grade level based at elementary schools, TK is free for families of any income level. Parents can still elect to keep their children with family or in private child-care centers at schools, churches or homes, depending on what best fits their needs. But while subsidies for these non-TK options exist, not everyone can access them easily.
The early educators assembled on Zoom commiserated about the kinds of abashed emails that had become all too familiar: The family just loved their program, but they were sorry to say that their little one would soon be switching to TK.
The child-care dilemma
California's child-care costs are among the highest in the nation; care for a 4-year-old averages $13,000 a year in the state. In a market this expensive, Powell said the addition of TK as a broadly available, publicly funded option is a boon to parents.
"Unfortunately," she added, "this is an ecosystem where everything is connected. And by dramatically changing care for one group of children, it's destabilizing the rest of this sector."

Center for the Study of Child Care Employment
A child-care provider she interviewed put it more bluntly: "TK has killed my business."
In an Aug. 12 report, Powell and other researchers from the Center for the Study of Child Care Employment at Berkeley spell out how the popular universal TK program has impacted early child-care workers - drawing their conclusions from enrollment data and focus groups with the early educators themselves. The dilemma facing these educators, Powell said, boils down to, "What do you do when all of a sudden you have to redevelop your entire business model in the span of just a few years?" So far, they aren't getting enough support, the researchers found.
Like New York City and the Canadian province of Quebec, both of which have instituted universal TK, Powell said that California is facing "predictable growing pains" as it rolls the program out. Her team's analysis found that in 2025, TK enrollment accounted for 31% of the market share of care for 4-year-olds in the state. At the same time, non-TK early child-care centers saw the proportion of 4-year-olds enrolled in their programs - relative to younger children - drop. For example, only 57% of licensed family child-care providers, meaning educators who base their child-care businesses in homes, reported caring for any 4-year-olds.

Ilene Perlman/Center for the Study of Child Care Employment
Fewer 4-year-old pupils was a consequence everyone expected. But while researchers had anticipated seeing increased enrollment of 3-year-olds in those freed-up slots, they instead saw that number plateau, while the enrollment of even younger toddlers rose slightly. Overall, that demographic shake-up presents a large adjustment for caretakers. Because they're at a less independent stage of development, younger children require a lower caretaker-to-child ratio - meaning more employees on payroll - in addition to specialized training and a different physical setup, like removing climbing structures best suited for older children.
"What we've effectively done is told an entire occupation that they're going to be relearning that occupation and doing a slightly different one," Powell said. But, she continued, that initial "oversight" doesn't mean the government can't act now to help the rest of the child-care sector adjust. Her paper, written with colleagues Wanzi Muruvi and Abby Copeman Petig, concludes with recommended actions for state and local legislators. "We need that parallel investment to come in as soon as possible," she said.
How government can help
For the state, which Powell calls the "ultimate arbiter" of the child-care system, suggestions include expanding existing subsidies for parents to enroll children in non-TK care and grants for facility changes to adapt spaces for toddlers. The report also calls for faster bureaucratic turnaround for centers seeking to update their age-range licensing and incentives for school districts to better collaborate with other providers for extended-day care.
The brief says county governments can help smooth the transition by offering professional development or college courses focused on care for children ages 0 to 3, facility-conversion grants, assistance advertising the increased availability of slots for younger children, and opportunities for child-care workers to share strategies around these shifts.

Ana Fox-Hodess/Center for the Study of Child Care Employment
Powell pointed out that these changes would benefit parents of young children too, who ideally would be able to choose between many subsidized options to find one whose curriculum, cultural fit, hours and location best work for their families. It would also ensure that the state doesn't leave behind the often-underappreciated workforce who staff these non-TK child-care centers, she said.
"Early educators are predominantly women of color in California, and they're often treated as babysitters, not the professionals with the skills, the years of experience, and quite frankly, the grit that it takes to do this job," Powell said. By offering more resources as these workers pivot their business models to younger attendees, she said, California can help early educators adapt: "That way they don't burn out or walk away from this field they're invested in."