Skip over navigation

Journal Issue: The Next Generation of Antipoverty Policies Volume 17 Number 2 Fall 2007

Next Steps for Federal Child Care Policy
Mark H. Greenberg

Low-Income Families, Work, and Child Care

Most of the nation’s 13.5 million low-income families with children (those with household income below 200 percent of the poverty line) include a full-time, year-round worker.1 In two-thirds of the nation’s 5.7 million poor families with children (those with household income below the poverty line), a family member worked during the year; in onethird, a family member worked full-time, year-round.2 The share of poor children in families with a year-round full-time worker grew substantially during the 1990s and despite some fall-off since 2000 remains well above the share during the early 1990s.3

Low-income working families are less likely to pay for child care than are higher-income families. When they do pay, they purchase less expensive care, but pay a much larger share of their income for it.4 They are much less likely to use center-based care. Within each type of care, they pay considerably less than higher-income families do. On a perhour basis, families with incomes above $75,000 pay more than twice as much for care as families with incomes of $10,000 or less and about 60 percent more than families with incomes between $10,001 and $30,000.5

Most low-income working families do not receive child care assistance. Federal law permits states to use their federal child care block grant funds to provide subsidy assistance to families with incomes below 85 percent of state median income. Almost all states elect to set lower eligibility thresholds. The U.S. Department of Health and Human Services (HHS) has estimated that 28 percent of children eligible under state rules received subsidies in 2003.6 HHS estimated that the 12 percent of children eligible under federal law received subsidy assistance in 1999, but thereafter it ceased reporting the share of federally eligible children who received child care assistance. The Center for Law and Social Policy estimated that 14 percent of federally eligible children—about one in seven— received child care assistance in 2000.7

The lack of child care assistance has adverse effects on families and lowers the likelihood that parents can sustain employment. Parents lacking child care assistance may go into debt, return to welfare, choose lower-quality and less stable child care, lose time from work, or be forced to choose between paying for child care and paying for rent or clothes.8 Although researchers have not experimentally evaluated how providing child care assistance affects parental employment, a set of studies has found that low-income parents who receive help meeting child care costs are more likely to get and keep work. One research summary reported that “while employment and subsidy use are inherently intertwined, each influencing the other, mothers who use subsidies appear more likely than other low-income mothers to: work at a job, work more hours, work standard schedules, sustain employment, [and] earn more.”9

Child care subsidies increase family disposable income by freeing up dollars that would otherwise go for child care. Providing a subsidy to offset a family’s child care costs does not in itself affect poverty under official measures, because noncash benefits are not treated as income and work expenses are not considered in determining the number of families in poverty. But Isabel Sawhill and Adam Thomas have estimated that if child care expenses were considered, an additional 1.9 million people, including more than 1 million children, would be considered poor.10

By lowering prices, subsidies can improve access to higher-quality care. A National Academies report found that “the quality of child care is likely to have important consequences for the development of children during the early years and middle childhood,” and that because of the amount of time children spend in child care, “child care provides an important opportunity to promote [children’s] healthy development and overall wellbeing.” 11 The report noted, “In comparison to their higher income peers, children of lowincome families appear more likely to receive poor-quality child care and less likely to receive excellent quality child care, especially in the early years.”12 Although higher cost does not ensure higher-quality care, it is often at least a prerequisite as many characteristics of higher-quality care, including better-trained teachers, smaller class sizes, and lower adultchild ratios, are more costly.13 Low-income parents are more likely than higher-income parents to cite cost or affordability as a key factor in choosing child care arrangements.14

Higher-quality care is associated with better child outcomes on a range of key schoolreadiness dimensions, including “basic cognitive skills (language and math) and children’s behavioral skills in the classroom (cognitive/attention skills, sociability, problem behaviors, and peer relations), both of which are important factors in children’s ability to take advantage of the opportunities available in school.”15 In their article in this volume, Greg Duncan, Jens Ludwig, and Katherine Magnuson note that new scientific research documents lifelong consequences from early brain development, as well as the importance of “earlier foundational skills” on which “complex cognitive capacities are built,” and cite evidence that high-quality intensive early education programs can improve children’s life chances. Most child care available today does not reach the quality of such intensive programs. Nevertheless, researchers at the Institute for Research on Poverty have concluded, “Children who attend higher-quality child care settings . . . display better cognitive, language, and social competencies on standardized tests.”16 The Cost, Quality, and Outcomes in Child Care Centers Study, which began in 1993, was a longitudinal study of children in four states, and was designed to examine the influence of typical center-based child care on children’s development. The study population was limited to children in families that had elected center-based care. The study found that “the quality of children’s experiences in typical child care centers affects . . . their readiness for school,” with higher quality associated with improved math and language abilities, as well as social skills.17

Child care subsidies appear to promote access to center-based care. The National Academy of Sciences reported, “Both experimental and correlational studies have found that center-type experiences are associated with higher scores on cognitive and language assessments, particularly for 3- and 4-year olds.”18 Poor children particularly benefit from access to center care, but low-income children are less likely to be in center-based care than are their higher-income peers.19 However, low-income children receiving child care subsidies are more likely than other low-income children to participate in center-based care arrangements.20