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Income & employment fluctuations among low-income working families and their implications for child care subsidy policy

Some families may be eligible for child care subsidies at the beginning of a 12-month period, but lose their jobs (and not look for new work), while keeping their children in subsidized care. Others may see their incomes rise, but continue to receive subsidies while other eligible families remain unserved. Shorter redetermination periods give more families an opportunity to receive child care subsidies in these situations. On the other hand, a continuous CCDF subsidy for a full 12 months will prevent disruptions in a child's care, promoting child development and a family's economic stability. If rising incomes or job losses are only temporary experiences for families who receive subsidies, providing a full 12 month child care subsidy could be a more effective way to invest scarce resources. The critical question thus becomes: what is the actual nature of families' economic stability (or instability), and what are the implications for child care eligibility? In this brief, we address that question, examining the income and employment patterns of potentially eligible working families over a 12-month period and discussing the implications for subsidy authorization, eligibility redetermination and reporting policies. The findings of our analyses reveal that income and employment do fluctuate for many of the families that would be eligible for child care subsidies. Many who are eligible at the beginning of a 12-month period experience brief job losses or periods of increased income, only to return to work or to a lower income level within a few months' time. Thus, full implementation of 12-month subsidies will not result in subsidizing care for a significant number of parents that have either lost work long-term or sustained an income above 85 percent of State Median Income (SMI). (author abstract)
Resource Type:
Reports & Papers
United States

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