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Barriers to maintaining child care coverage: An analysis of states' child care subsidy policies

Description:
Child care subsidies play an important role in stabilizing parental employment and helping low-income families access quality and affordable child care options. However, low-income families on average only maintain subsidies for short periods of time, commonly known as spells. While there are several reasons a family may stop using subsidies, some policymakers and researchers have expressed concerns that program policies may create barriers to subsidy maintenance. With limited federal requirements under the Child Care and Development Block Grant, states have developed divergent policies for their state-based child care subsidy programs. To date, research on child care subsidies has mainly focused on the demographics differences between subsidy recipients and low-income families who do not use subsidies. Very little is known about the effects of states' policies on whether families' maintain subsidy coverage. Using data from the Urban Institute's CCDF Policies Database and the Administration for Children and Families' CCDF Administrative Dataset this paper analyzes the effects of polices on average spell length and stability of child care spells from October 1, 2007 to September 30, 2010. In particular, the study focuses on policies related to whether families can count job search as an eligibility activity, the length of time between when a family must redetermine its eligibility, and requirements around reporting changes in income. To calculate the effect of policies on subsidy receipt, a difference-in-difference model was run using fixed state and time effects. All three policies had significant effects on average length and stability of spells, although to varying degrees. Policies that did not require families to report all changes in income were associated with longer and more stable child care spells. An initial analysis of job search eligibility found that states that did not allow job search were associated with increases in spell length and stability of spells. However, further analyses that focused on both TANF recipients and the share of eligible children with stable spells found that more restrictive policies around job search were in fact associated with a decrease in average spell length and stability. This could mean that states with more restrictive policies may be serving more stable populations and a measure only looking at observed spells will not capture the effect on less stable families likely effected by the policies. Finally, redetermination policies had mixed effects on average length and stability of spells, with longer redetermination periods resulting in increases in both stable and unstable spells. Shorter eligibility periods may create barriers for some families, while allowing others to take care of unresolved issues that may prevent them from maintaining subsidies. In developing policies, states face the dual challenge of meeting the needs of lowincome families while ensuring subsidies are provided at appropriate levels. Studies such as this may offer states the opportunity to identify policies that create most significant barriers to subsidy maintenance and consider how changes to policies may better meet the needs of low-income families. (author abstract)
Resource Type:
Reports & Papers
Author(s):
Country:
United States
State(s)/Territories/Tribal Nation(s):
Alabama; Alaska; Arizona; Arkansas; California; Colorado; Connecticut; Delaware; District of Columbia; Florida; Georgia; Hawaii; Idaho; Illinois; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maine; Maryland; Massachusetts; Michigan; Minnesota; Mississippi; Missouri; Montana; Nebraska; Nevada; New Hampshire; New Jersey; New Mexico; New York; North Carolina; North Dakota; Ohio; Oklahoma; Oregon; Pennsylvania; Rhode Island; South Carolina; South Dakota; Tennessee; Texas; Utah; Vermont; Virginia; Washington; West Virginia; Wisconsin; Wyoming

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