The rising demand for child daycare services reflects demographic trends. Over the 2002-12 period, the number of women of childbearing age (widely considered to be ages 15 to 44) is expected to grow very slowly; however, the labor force participation rate of such women is expected to increase. As a result, the number of women in the labor force with children young enough to require child daycare will increase steadily. Also, the number of children under age 5 is expected to increase during this period.

The demand for child daycare services will continue to grow. As the labor force participation of women between the ages of 16 and 44 remains high, parents of preschool and school-age children are expected to seek more daycare arrangements. As parents continue to work during weekends, evenings, and late nights, the demand will grow significantly for child daycare programs that can provide care during nontraditional hours. School-age children, who generally require child daycare only before and after school, increasingly are being cared for in centers.

Center-based care should continue to expand its share of the industry as government increases its involvement in promoting and funding child daycare services. Increased subsidies for children from low-income families attending child daycare programs would result in more children being served in centers. Demand for preschool teachers could increase if many States implement mandatory preschool for 4-year-old children. Another factor that could result in more children being cared for in centers is the increasing involvement of employers in funding and operating daycare centers. Welfare reform legislation requiring more welfare recipients to work also could contribute to demand for child daycare services.