The Future of Children, Princeton - Brookings: Providing research and analysis to promote effective policies and programs for children.

At the dawn of welfare reform in the mid-1990s, a fair amount of research had examined the type of child care relied upon by low-income families. As illustrated in Figure 2, national data indicate that families living below the poverty level relied heavily on relatives to care for both their preschoolers and school-age children in 1995, as did families living above poverty. However, families who were better off used nonrelative care almost as frequently as relative care for their preschoolers, interspersing different types of care.⁹ Research shows, for example, that more than 70% of four-year-olds from affluent families were enrolled in a center or preschool in 1995, compared with 45% of those from low-income households.¹⁰ Affluent families were also much more likely to provide multiple types of enrichment activities for their children in grade school. School-age children in households earning more than $55,000 a year were almost three times as likely to participate in sports, and more than twice as likely to take lessons after school, than were children from families earning under $18,000 annually.¹¹

Studies show that the types of care families select also vary widely across states. To illustrate these between-state differences, Figure 3 shows the share of preschool children who attended a center-based program or family child care home in 1997 among families with a working mother in four different states, by poverty level. The share of children from households earning less than twice the poverty line who attended centers ranged from 17% in California to 38% in Massachusetts.¹²

Changes in Child Care Spurred by Welfare Reform

Before welfare reform, a significant number of mothers living in poverty cared for their children themselves, as they could usually rely on welfare without working. Caseload data from 1995 indicate that only about 20% of families receiving welfare were either engaged in work activities or employed, and 4.9 million families (monthly average) were on the rolls.¹³ But the 1996 federal welfare law required for the first time almost all parents, including those with preschool-age children and younger, to participate in work activities.¹⁴ By 1998, the percentage of families engaged in work activities or employed had grown to 35%, and only 3.2 million families were on the rolls.¹³ As welfare mothers moved into jobs, their children—especially preschool-age children—moved into nonmaternal child care arrangements. Many welfare mothers did not have a child care provider prior to the welfare-to-work requirements, and even for mothers who did, the number of hours their children spent in nonmaternal care likely increased.¹⁵

A Berkeley–Yale research team estimated that at least one million preschool-age children moved into new child care settings between 1996 and 1998, following changes under welfare reform.¹⁶ This estimate may be conservative, as it includes only families who were enrolled in work activities and those employed about a year after leaving welfare. Also, the estimate did not include the increasing number of older children who began spending time at home alone after school while their mothers were still at work.

Data on the types of child care selected by welfare parents are emerging from a number of studies in several states and cities across the country. The majority of welfare families rely on informal arrangements when they begin to participate in work activities. For example, in Vermont, most of the growth in use of nonmaternal child care following welfare reform involved relatives and informal providers, up 26% in the early years of the state's welfare-to-work demonstration program, whereas use of licensed centers and family child care homes increased by only 5%.¹⁷ But in some cities and counties across the country, more than 40% of welfare families with preschool-age children select center-based care as they move into work activities.¹⁸

The Growing Up in Poverty (GUP) Project is detailing the wide variability in child care histories of young children in California, Connecticut, and Florida. (See Box 2.) The first wave of maternal interviews and child care observations, collected in 1998, revealed that 70% of participating Florida mothers selected center-based care after entering welfare-to-work programs, compared with the 29% and 13% of mothers who selected centers in California and Connecticut, respectively.¹⁹ This suggests that local implementation and center supply conditions may be important factors affecting mothers' child care selections.

Moreover, data from early welfare-to-work programs show that when participation in such programs is complemented by strong child care and after-school support for families, use of center-based care rises. For instance, in Minnesota, the selection of centers or family child care homes was significantly higher for families participating in the welfare-to-work program (the experimental group) than for nonparticipating families (the control group): 53% versus 42%, respectively.²⁰ The majority of welfare parents not in the experimental group continued to rely on parental care, relatives, or other informal child care arrangements.

Data from the National Evaluation of Welfare-to-Work Strategies (NEWWS) identified several maternal and family attributes that helped to predict which welfare mothers would select centers rather than home-based arrangements for their three- to five-year-olds. Most important were higher levels of maternal education and employment, a higher level of cognitive stimulation provided in the home, and residence not in public housing.¹⁸ These findings are similar to results from the GUP Project that showed that welfare mothers with stronger labor force experience were more likely to select center-based care, after taking into account child age and a variety of other factors.

Furthermore, working poor families have been found to choose center-based care more often than welfare families do. As parents move off welfare and into more stable, full-time employment, they are more likely to choose centers over less formal types of care. For example, among welfare recipients in Los Angeles with children ages 2 to 4, 27% selected center-based care in 1999; 51% relied on informal care, and the remaining 22% used a family child care home.²¹ In contrast, working poor parents in Los Angeles with similar access to subsidies tended to select centers more often. About 59% selected center-based care, just 15% used informal care, and the remaining 26% selected a family child care home. For school-age children, 42% of parents in the county welfare system relied on informal care; among working poor parents, just 16% used informal providers.

Factors Affecting Choice of Care

Even as Head Start, state-funded centers, and preschool initiatives are expanding in many neighborhoods, many low-income parents continue to rely on informal arrangements with relatives, neighbors, or babysitters (often referred to as "kith and kin") for child care. Some analysts argue that low-income parents hold an a priori preference for informal child care arrangements. Evidence suggests, however, that other factors also play a role.

Over the past decade, much has been learned about the factors that influence parents' propensity to use child care and the type of care they select. Mostly this work has drawn from national samples of parents; only a portion has centered on low-income families. Findings from these studies suggest that the age of the child, trust and flexibility, cost, and accessibility figure prominently in parents' decision making about their children's care.

Age of the Child

Studies show that parents' likelihood of selecting formal care varies dramatically by the child's age. According to 1995 nationwide data, only 19% of families used formal care for their children less than age 1 during the hours a parent was engaged in school or work, but 50% use such care for their children ages 3 to 4. For school-age children, while only 3% of families used a formal child care facility, 35% used some type of enrichment activity—including sports, lessons, clubs, or before- and after-school programs—to help cover these hours, and over 20% left their children in self-care at times.²²

Similar patterns are reflected in studies of parents participating in welfare-to-work programs. For example, among the subgroup of welfare families who participated in California's GAIN program (a precursor to contemporary welfare-to-work programs), most relied on kith and kin to care for their infants and toddlers.²³ Only 23% of those with children ages 0 to 2 selected center-based care, compared with 47% of those with children ages 3 to 5. Those with school-age children also relied more heavily on centers or after-school programs than on kith and kin.

Trust and Flexibility

Many welfare-to-work programs require quick entry into orientation sessions, job clubs, or job search activities, so mothers entering these programs must rapidly find a trusted organization or individual to provide child care. Interviews with these mothers suggest that they often trust kin members or friends more than center-based caregivers because kith and kin offer familiar child-rearing practices and speak their language, both figuratively and literally. In addition, kith and kin often have more flexibility than other providers to care for children early in the morning or later in the evening, which is important for many low-income mothers who work odd-hour shifts.

In the GUP study, for instance, mothers entering new welfare programs in 1998 were asked to rank the flexibility, trustworthiness, and interpersonal openness of their child care provider, as well as the extent to which their child received individual attention. Mothers scored kith and kin higher than centers on all four dimensions.²⁴ Other studies including interviews with women on welfare confirm this trust in and flexibility of kith and kin, especially when it comes to care for infants and young toddlers.²⁵

Language concerns, in particular, may affect mothers' trust in informal arrangements. The GUP study found that members of language minority groups (Latinas and Vietnamese Americans) are less likely to select center-based care.²⁶ Also, it appears that welfare mothers are less apt to use centers when they can rely upon more supportive kin or coresident adults for their children's care. At the same time, while Latina mothers in the Los Angeles welfare system were less likely to select centers (33%) than were Anglo clients (45%), such ethnic differences were not found among the working poor.²¹

Cost

The cost of child care is a significant consideration for all families, but especially for low-income families. A survey of welfare parents in Illinois, conducted in 1990, revealed that 81% worried about the cost of child care and just over half said they had serious difficulty finding a caregiver.²⁷ Formal care is generally more costly than informal care, which is often unpaid. Thus, many low-income families require a subsidy to gain access to center-based care or a family child care home. Data from the GUP Project corroborate this point. Researchers examined the flow of subsidies to single mothers who selected a child care provider after entering welfare-to-work programs in California and Florida, and found that subsidy use was heaviest among mothers who selected center-based care. Nearly 90% of mothers using centers received a full subsidy, whereas only 39% of mothers selecting a home-based setting received a subsidy.²⁸

When welfare or working poor parents do not receive a subsidy or cannot find publicly supported child care, they must pay out-of-pocket for whatever type of care they use, and these costs can be substantial. Results from the Urban Institute's "National Survey of America's Families" found that a third of all working parents who had children under age 13 paid for child care. Among those who paid, parents spent, on average, $190 per month (or 23% of earnings annually) on care in 1997.²⁹ For low-income families with a working mother, the percentage of family income spent on child care is even higher. According to 1995 survey data from the U.S. Census Bureau, among families who had an employed mother and paid for child care, those earning less than $18,000 a year spent an average of 30% of their annual income on care. In contrast, affluent families (those with annual incomes of approximately $54,000 or more) spent only 5% of their income, on average, for child care.³⁰

Given that the costs of child care can quickly become substantial, it is not surprising that many low-income parents put their names on waiting lists for subsidies and vouchers. For example, in a random survey of parents on such lists in Santa Clara County, California, researchers found hundreds of working poor mothers waiting for a subsidized child care slot or voucher.³¹ Two in five expressed concerns about the quality of their current child care provider and were eager to obtain support in order to afford another caregiver. Similar findings emerged from a study of families on waiting lists in Minnesota.³²

Accessibility

Neighborhood conditions and basic access to particular child care options also shape parents' choice of child care. When centers are available in poor neighborhoods, parents choose this form of care more frequently, especially as their children reach age three or four. When the supply of centers or family child care homes is scarce, working mothers must rely on kith or kin for child care or forgo their jobs.

The stock of child care organizations that has sprouted within states and neighborhoods varies remarkably. For example, the GUP Project studied provider markets across five counties in California, Connecticut, and Florida. The data suggest that the differences in child care selection patterns by welfare mothers could be explained, in part, by the differences in per capita supply of slots in centers and family child care homes in neighborhoods where the mothers resided. For example, the low use of center-based care in Connecticut is due, in part, to the low supply of centers in the research sites of New Haven and Manchester.²⁸

An analysis of California zip code data also found a close association between the share of welfare parents who selected a center or family child care home and the per capita supply of these organizations in the surrounding communities.²¹ And both the use and supply of formal care settings were found to be closely associated with average levels of maternal education, as illustrated in Figure 4. Other data corroborate that mothers with higher education levels are more likely to choose centers and preschools over kith or kin.³³ At the same time, maternal education is highly correlated with maternal employment rates and income levels. These may be the underlying factors driving both the increased demand for center-based care and the greater supply of centers in neighborhoods with higher maternal education levels.

In sum, many factors help to explain welfare parents' selection of care for their children, including the age of the child and the mother's level of trust and education. But as welfare parents enter the workforce and their incomes rise, so does the likelihood that they will choose a more formal child care arrangement—either a center or a licensed family child care home. Still, parents' choices concerning child care are influenced by the cost and accessibility of various options within their neighborhoods. Unless the full range of child care options is truly available and affordable, low-income parents' frequent reliance on kith and kin cannot necessarily be interpreted as their true preference.