I had a nanny until my child was almost 2 years old....then she had to go to daycare because my nanny gave me two days' notice that she was going on vacation out of the country (her home country) for SIX WEEKS. Luckily, I had researched and selected a daycare option - Primrose School. And though I was only going to send her there for the six weeks and then put her back with the nanny...she did so well (learned so many great things, smilling and looking forward to being there, etc.), I didn't want to go through the transition (that was HARD on me again). That and having 50% more income in my pocket. That being said, she DID get sick the first month. I was heartbroken because she had ONE cold before that time. She was a preemie and I did pretty well keeping her away from other people. But you know what happened when she got those colds (2 I'm thinking and possibly an ear infection)? She LIVED. And her pediatrician told me she'd be fine..and that I could let her get the colds now (during that time) or she'd get them when she entered pre-school. Now at almost 3 (in September), my baby looks forward to her Early Preschool Class. She has FOUR teachers since there are 15 students in her class. Strangers, friends, and family members are AMAZED at what she knows. I know she wouldn't be so far developmentally if she'd stayed home until 3. As a matter of fact, she had to be put in the older infants room instead of the toddler class because she wasn't as advanced. That said, I think a combination worked for me - nanny until 2 (I was hoping to have one until age 3 but didn't work out that way!) and then an accredited childcare facility after that. Pros of Nanny - one on one care; they come to your house everyday so you don't have to drive the child anywhere and they can dress the child saving you precious time; the child is familiar with the surroundings and is always home; nannies also help pick up after the kids...make them meals, etc.; you are not fighting against traffic to rush to pick up a child before the daycare closes; you can work later if need be; your child is really nurtured; your child is pretty much never sick unless you get them sick. Cons - you have to get backup childcare when they are out (sick, vacation, etc.); they do sign contracts but nothing can stop them from leaving or not giving enough notice for absences; you have to buy extra food for them ; they are always in the house unless you make plans for them to take your child out (I started my child at Gymboree Play classes); sometimes it is challenging to find a good one I guess the pros outweigh the cons.