Just thought I'd defend the "honor" of the unlicensed dcp.
As other posters have mentioned, I'd be more concerned with the dcp's philosophy and practices (and good references!) than the holding of a license that can't guarantee much of anything.
I am one of those SAHM's who wanted to be a dcp "just for the money--" that is to say, I'm not babysitting because I felt the need for more kids around my house!
I have a 2 year old, and a homeschooling 10 year old, and I thought taking a child or 2 "into the family" would work well for us.
I looked into getting licensed, but it seemed like too many hoops to bother, since I was only planning on having 1 or 2 kids. I have worked with small kids for years, and have plenty of excellent refs, so I didn't feel the need to have The State's seal of approval.
I have one full-time toddler, and a few occasional kids. I told the parents I'd try my best to treat their kids like my own, and I do. I'm not trying to screw the parents over, either. My full-time family pays me as much as a licensed provider because I'm worth it! I treat their kid very well. I don't charge late fees, or make them pay if the baby's sick, or if they take a day off, etc..
They knew going in that I don't have a backup, but I tell them way in advance if I need time off, and I never abuse their trust by taking days off for no good reason.
I know I'm starting to sound like an ad for myself
, but my point is this: I'm an unlicensed dcp, and I don't suck.
You can't really say, "Will a licensed or unlicensed dcp be better," you have to look at individuals.