Based on the finding that the most important determinant of child care quality is the presence of consistent, well-trained, and well-compensated caregivers, this report discusses strategies to improve compensation in child care. It analyzes structural and social barriers to investing in decent-paying child care jobs; profiles a wide range of federal, state, and local initiatives to increase child care compensation; and outlines a recommended agenda for further action by states and communities. After an executive summary, Part 1, "Introduction," describes the results of a national study identifying program options that create high-quality jobs for adults and high-quality services for children; identifies barriers to investing in child care jobs, including over-reliance on parent fees and exclusion of child caregivers from leadership positions; and delineates guidelines for effective training and employment, including addressing requirements of child care work and trainees' needs and positioning new providers for career mobility. Part 2, "Promising Practices for Improving Child Care Compensation," describes federal initiatives to improve compensation, such as those within military child care and Head Start; discusses initiatives to link training with compensation; presents state efforts to improve reimbursement rates for programs meeting the National Association for the Education of Young Children accreditation guidelines; describes center-based initiatives such as unionization and business partnerships; and outlines programs providing health insurance to child caregivers. Part 3, "Next Steps," offers recommendations for system-wide reform at the state level, linking training and compensation, health insurance, and reimbursement rates and quality improvement grants. (Contains 23 references.) (KDFB)