Researchers examining data on the early years workforce in England and found evidence of increased use of unpaid staff in all childcare settings.
The heaviest use of volunteers was found to be in reception classes, where volunteers accounted for 15.5 per cent of the workforce. In nurseries 10.8 per cent of staff were volunteers and in non-school settings the figure was 7.8 per cent.
The report warned that the use of unpaid staff could be damaging.
"The increasing reliance of the sector on these staff raises questions about how they are deployed, their skills and qualifications, and their effect on the quality of provision for children," it states.
"Additionally, it is not clear what impact they have on the business and cost models of providers, or on what is feasible for other providers without access to this unpaid labour."
The report also predicted that the early years workforce is set to become less qualified in the future because fewer staff are working towards higher-level qualifications and 21 per cent of employees qualified to level 6 or higher are expected to retire in the next 10 to 15 years.
The institute suggested early years staff are put off from pursuing higher qualifications because of a lack of financial reward and the rising cost of level 3 early years educator courses, which increased in price from £250 in 2012 to £1,900 in 2015.
Sara Bonetti, associate director of early years at the Education Policy Institute, said the findings raise doubts over the stability of the early years workforce.
"While there have been some positive measures to support the early years workforce, such as increases in staff pay, our analysis highlights a number of unwelcome trends emerging, which pose a threat to the quality of provision in England," she said.
"Staff qualification levels remain low - with levels even declining among staff working with the very youngest children. In the near term, a lack of highly trained staff may hinder the recent expansion of childcare entitlements.
"In the long-term, there is considerable risk that a continued fall in qualification levels will have a negative impact on children, particularly the most vulnerable.
"To ensure the future sustainability of early years provision, it is vital that the government recognises these worrying trends and takes steps to deliver on commitments set out in its workforce strategy."
Neil Leitch, chief executive of the Pre-school Learning Alliance, said that while the government's Early Years Workforce Strategy was a "welcome first step", the institute's findings show that more must be done to avert "a sector-wide recruitment crisis".
"With many childcare providers facing an increased salary bill as the result of minimum wage increases but little to no change in government funding rates, workforce pay is inevitably going to become an even bigger challenge for the sector in the near future," he said.
"If the government wants to ensure accessible, quality early care and education for all children, it needs to ensure that we have a well-qualified professional workforce to deliver this - this means investing in the sector and ensuring that childcare is, and remains, a viable career choice."
The findings echo those of the National Day Nurseries Association's recent workforce survey, which found the number of Level 3-qualified practitioners has dropped by almost a fifth since 2015.
The Department for Education published its Early Years Workforce Strategy in March 2017. Measures within the strategy included dropping the requirement for early years staff to gain good GCSE grades in maths and English before completing Level 3 training and the development of clear career paths for early years workers.