_{Major Insights & Findings}  

_{Note: Number in parentheses after summary indicates the paper from which the finding comes. All references are listed at the end of this document.}

On Trade Offs for Child Care Policy 

  _{We suggest that (1) the percent of federally eligible families that receive child care subsidies and (2) the dollar amount of public expenditures per subsidized child are reasonable indicators that could be widely used to assess the trade offs that governments make between using child care subsidies (1) to facilitate parental work and (2) to prepare their future work force by improving services to low-income children (18).}

On Take-Up Rates for Child Care Subsidies

  _{Using administrative data and survey data for states that guarantee subsidies for all eligible families, we estimate the family-level take-up rate for child care subsidies in the US to be around 40% in early 2000. For states that do not guarantee subsidies, service rates for child care subsidies range approximately from 14% in Minnesota to 50% in Massachusetts (18).}

  _{It is important to differentiate “take-up” rates from “service” rates for child care subsidies. Take-up rates are generally only available for programs that guarantee services to all eligible applicant families.  After welfare reform, most states do not offer such guarantees. For states that do not guarantee child care subsidies, the proportion of the eligible population that receives subsidies is a service rate rather than the take-up rate for child care subsidies.  Modeling service rates requires consideration of both governmental decisions (the supply side) and families’ decisions (the demand side) regarding child care subsidies. (18).}

On the Employment and Earnings of Child Care Subsidy Recipients

       _{Increased funding for child care subsidies increases the probability that current and former welfare recipients will work. This is true even for cash assistance recipients with substantial barriers to employment.  However, current and former cash recipients with few barriers to employment show the highest improvement in their level of employment. (16) (12).}  

  _{Increased funding for child care subsidies increases the earnings of low-income working families who are not on cash assistance.(9).}

On Parental Co-Payment Scales 

     _{Requiring families receiving child care subsidies to pay a small part of the cost of care for their children (i.e., requiring them to make co-payments of 10% or less) does not appear to have a detrimental effect on their earnings. (16).}  

_{When the required family child care co-payment takes more than 10 cents out of every extra dollar of earnings, family earnings are observed to decline.  The challenge for the states is to develop co-payment scales that prepare low-income families to gradually assume responsibility for their children’s care as their earnings increase and that do not discourage such families from taking on extra work and earnings. (16)} 

On Child Care Regulations 

_{If child care standards are set at reasonable levels, they can improve the quality of care in a community.  However, if standards are set too high, both quality and availability of child care appear to decline.  An obvious challenge faced by states is the need to set well-calibrated standards that do not have detrimental effects on the quality or availability of child care.(2)} 

_{Minimum child care standards can have significant impact on the availability, price, and quality of options available in a community.  They also appear to have pervasive unexpected or “spillover” effects.  (6) (2).}

  _{Group size regulations affecting family child care providers can have a significant effect on staff-to-child ratios at preschool centers.  (This is an example of an unexpected or spillover effect of minimum child care standards.)  Specifically, in areas where regulations limit to five the number of children to be cared by a family child care home, staff-to-child ratios at preschool centers are much lower (on average 1:9) than in areas that do not regulate the maximum number of children allowed in a family child care home (on average 1:16).  (6) (2).} 

On the Information Provision Function of Resource &Referral (R&R) Agencies

_{Providing information to parents through Resource and Referral (R&R) community agencies reduces the range of prices paid for center-based child care and may also decrease the average price for this type of care. A possible benefit of a narrower price range in communities with R&Rs may be that parents can more easily locate affordable care. (4).}

_{The lower price ranges and lower average prices we have observed in communities with R&R agencies do not appear to be associated with any increase or decrease in the quality of center-based child care as measured by staff: child ratios. (4)} 

On Methods to Assess Unmet Need

_{The Wellesley Partnership has developed both theoretically grounded and practical methods for estimating the unmet need for child care in geographic areas.  We first developed a rigorous econometric model for estimating unmet need, which we then refined into a shorter, more practical approach.  (11) (10).}

_{Results obtained with our practical approach are significantly correlated with our more rigorous method.  We are thus hopeful that our practical approach for estimating unmet need may prove useful as a general measure.  (11) (10).}

_{In our practical approach, we first obtain key measures of the availability and need for services in each local area.  We then compare the data from each area against the median value on each indicator for the surrounding area (i.e., the county, region, or state), which serves as the standard.  This method is similar to that used by the medical profession. (11) (10).}

Where Do Parents Receiving Child Care Subsidies Work?

_{Our studies of working families receiving child care subsidies indicate that most work in the retail sector, especially in eating and drinking establishment, particularly fast food restaurants, and grocery stores. Many others work in nursing homes, temporary business services, department and discount stores, hotels/motels, and cleaning services.  With relatively few opportunities for rapid advancement in these occupational areas, these families are unlikely to be able to pay the full cost of their children’s care. (1)} 

_{We have documented that employers of working families with child care subsidies benefit indirectly from subsidy programs.  Our experience in Florida with the Child Care Partnership Act indicates that it is possible to encourage employers to help share the cost of care by providing matching funds for child care for their low-income employees. (1)} 

On Child Care Quality

_{The proportion of accredited center-based child care providers has increased since 1996, but in 1999 it was low in the areas we studied (about 2% in Miami-Dade County, Florida and about 20% in Massachusetts).   Very few family child care providers in Miami-Dade and in Massachusetts were accredited in 1999. (14)(13).}

_{We have found evidence in Miami-Dade County that personnel working for subsidized child care providers are significantly less likely to have traditional educational credentials (such as a high school diploma, AA degree, or BA degree) than personnel working for providers that do not serve subsidized children.  (13).}  

_{In Miami-Dade it appears that providers dependent on the subsidized child care program are becoming more reliant on staff with CDA credentials and less reliant on staff with formal educational credentials. (13).} 

On Child Care Availability

  _{We have found several demographic factors that are significant in determining availability of child care across communities.  These include: the number of children age 5 and under in the community, employment levels, residential stability, the ratio of adult men to women, the ratio of infants to children under age 11, the ratio of young children to adults, and the proportion of single working mothers. (3)}

_{The availability of child care varies markedly across local communities. In Massachusetts, some poor communities have a limited supply of center-based care, especially full day care.  Although there is often a better supply of family child care in such neighborhoods, it is nevertheless more limited than in higher-income neighborhoods.  Other poor communities in Massachusetts are reasonably well served.   The same can be said of poor communities in Miami-Dade, Florida. (3) (11) (5).}

  _{From 1997 to 1999, the availability of preschool center-based care in Massachusetts increased by 7%, while the availability of preschool care at family day care homes increased by 26% and the availability of licensed school age care increased by 49%.  (14).}

_{Growth in the availability of child care in Miami-Dade from 1996 to 1999 was much slower, an overall 3.5% per year.  In Miami-Dade growth was more rapid for providers accepting children with child care subsidies than for providers who did not accept them. (13)} 

  _{In spite of the slow growth in the availability of child care in Miami-Dade during the period 1996-1999, there was more than a doubling of the number of low-income infants and toddlers with child care subsidies in formal care in MDC, an area where cash assistance recipients are required to be active when their youngest child is three years old. (17).} 

On Child Care Prices

  _{Child care prices vary substantially across geographic areas.  For all age groups except school age, the price of child care in Massachusetts is more than double the price in Miami-Dade, Florida.  For example, the average weekly price of preschool care (i.e., the care of 3- to 4/5-year olds) in Massachusetts is approximately $160 versus approximately $70 in Miami-Dade.  Adjusting for differences in the cost of living, Massachusetts’ prices for the care of children not yet enrolled in school, even in the high-cost Boston area, remain about 70% higher than the prices in Miami-Dade. (13) (14).}

  _{Prices charged by providers who accept children with child care subsidies vary widely across geographic areas.  In Massachusetts these prices are slightly lower than the prices charged by providers that do not accept children with child care subsidies.  In contrast, in Miami-Dade the prices charged by providers participating in the subsidized child care program are higher than the prices charged by providers that do not participate. (13) (14).} 

  _{Child care centers in both Massachusetts and Miami-Dade appear to be subsidizing their infant and toddler programs.  This helps to explain why it has been difficult to expand the amount of infant and toddler care available. (17).} 

On Subsidized Child Care Programs

_{The way in which subsidized child care programs operate differs markedly across states.  For example, in Massachusetts the majority of child care vouchers issued go to cash assistance recipients, while in the Birmingham area of Alabama most vouchers go to the income-eligible population not receiving cash assistance. (8) (7).} 

  _{Child care subsidies are used predominantly to pay for center-based care in Miami-Dade, FL, while in Massachusetts subsidized child care is more often provided in family child care homes (approximately 25%) and in informal settings (approximately 25%). (13) (14).}

_{The proportion of child care providers accepting children with child care subsidies varies widely across geographic areas. For example, during the three-year period 1996 to 1999, only 28% of providers in Miami-Dade ever accepted children with child care subsidies, while 41% of providers in Massachusetts accepted children with subsidies. (13).} 

_{In Miami-Dade it appears that providers dependent on the subsidized child care program are becoming more reliant on staff with CDA credentials and less reliant on staff with formal educational credentials. (13).} 

On the Duration of Subsidized Child Care

  _{The average duration of a “spell” of subsidized child care in Massachusetts (as measured by voucher accounting records) is a little less than six months and differs depending on various factors, such as type of provider, geographic area, and type and level of reimbursement to providers.  For example, in Massachusetts a spell of subsidized child care is somewhat longer lasting when the care is provided in centers, when provider reimbursement rates are higher, and when “blended” reimbursement rates are applied (e.g., academic-year programs that incorporate after-school and holiday care). (8).}

_{Subsidized child care enrollments (as measured by administrative records) are more durable (a year and three months on average) in the Birmingham area of Alabama when the children come from income-eligible families not receiving cash assistance and least durable (median length of about six months) when the children come from families participating in the JOBS program.  In Birmingham, subsidized enrollments in child care homes are more durable (typically lasting over a year) and least durable in centers (typically lasting about eight months). (9).}

On the Location of Child Care

  _{Our studies have shown that most low-income children are cared for in or close to their residential neighborhood.  However, we have found that many of the parents with children in subsidized care travel long distances to work. Therefore, we have concluded that the transportation problem of low-income families with children appears to be primarily a work transportation problem rather than a child care transportation problem. (5).}

On Welfare Reform

_{Welfare reform has significantly decreased caseloads for cash assistance and other family-support programs, but it has significantly increased the number of children being cared for outside their home.  (15).} 

_{Since welfare reform, cash assistance and child care subsidy programs have become more diverse across states and, for a number of states, across local areas. (15).}

Referenced Publications and Working Papers   

(1) Lee, C. W., Ohlandt, S. J., & Witte, A. D. (1996). Parents receiving subsidized child care:  Where do they work?  Tallahassee, Florida: Florida Children's Forum.  Featured in the CHILD CARE BULLETIN, Issue 11 (October/November, 1996) of the National Child Care Information Center, Washington, DC.  Also featured at: http://ericps.ed.uiuc.edu/nccic/ccb/ccb-so96/ccb-so96.html. 

(2) Chipty, T. & Witte, A. D. (July 1997).  An empirical investigation of firms’ responses to minimum standards regulations.  Working Paper #6104. Cambridge, MA: National Bureau of Economic Research. Available at: http://www.nber.org/papers/w6104.  

(3) Queralt, M. & Witte, A. D. (March 1998).  Factors influencing the neighborhood supply of child care in Massachusetts.  Social Service Review, 72(1), 17-46. 

(4) Chipty, T. & Witte, A. D. (April 1998).  Effects of information provision in a vertically differentiated market.  Working Paper #6493. Cambridge, MA: National Bureau of Economic Research.  Available at: http://www.nber.org/papers/w6493  

(5) Queralt, M. & Witte, A. D. (September 1998). A map for you? Geographic information systems in the social services. Social Work, 43(5), 455-469. 

(6) Queralt, M. & Witte, A. D. (1999). Child care regulations: A method to pursue social welfare goals? Children and Youth Services Review, 21(2), 111-146. 

(7) Witt, R., Queralt, M., & Witte, A. D. (March 1999).  Duration of subsidized child care enrollments in the Birmingham areas of Alabama: A briefing report.  Working Paper.  Tallahassee, FL: Tri-State Child Care Research Partnership and Wellesley, MA: Wellesley College Child Care Research Partnership.   

(8) Witte, A. D. & Queralt, M. (May 1999).  Duration of subsidized child care arrangements in five areas in Massachusetts.  Working Paper.  Wellesley, MA: Wellesley Child Care Research Partnership. 

(9) Witte, A. D., Queralt, M., Chipty, T., & Griesinger, H.  (June 1999).  Unintended consequences? The welfare reform "package" and the earnings of low-income women.  Working Paper 6798. Cambridge, MA: National Bureau of Economic Research.  Available at: http://www.acf.dhhs.gov/programs/opre/profiles.htm  

(10) Queralt, M. & Witte, A. D. (August 1999). Estimating the unmet need for child care: A practical approach.  Working Paper 99-05. Wellesley, MA: Department of Economics, Wellesley College. 

(11) Queralt, M. & Witte, A. D. (December 1999). Estimating the unmet need for services: A middling approach.  Social Service Review, 73 (4), 524-559. 

 (12) Lemke, R., Witte, A.D., Queralt, M.,  & Witt, R. (March, 2000).  Child Care and the Welfare to Work Transition. Working Paper 7583.  Cambridge, MA: National Bureau of Economic Research. Available at: http://www.nber.org/papers/w7583

(13) Queralt, M.; Witte, A.D., & Griesinger, H.  (July 2000).  Championing Our Children: Changes in Quality, Price, and Availability of Child Care in the Welfare Reform Era.  Working Paper #2000-07.  Wellesley, MA: Department of Economics, Wellesley College.  Available at: http://www.wellesley.edu/Economics/wkpapers/index.html

(14) Witt, Robert; Queralt, M., & Witte, A.D.  (November 2000).  Measuring changes in Child Care Availability, Quality and Price in Massachusetts between 1997 and 1999.  Working Paper #200-12 .  Wellesley, MA: Department of Economics, Wellesley College.  Available at: http://www.wellesley.edu/Economics/wkpapers/index.html 

(15) Loprest, P., Schmidt, S., & Witte, A. D. (2000).  Welfare reform under PRWORA: Aid to children with working families, Tax Policy and the Economy, 14, 157-203. Available at: http://www.wellesley.edu/Economics/wkpapers/index.html 

(16) Queralt, M., Witte, A. D., & Griesinger, H. (December 2000).  Changing policies, changing impacts: Employment and earnings of child care subsidy recipients in the era of welfare reform. Social Service Review, 74 (4), 588-619.

(17) Witte, A.D., Queralt, M., Witt, R., & Griesinger, H. (July 2001).  The Policy Context and Infant and Toddler Care in the Welfare Reform Era.  Working paper 2001-04.  Wellesley, MA: Department of Economics, Wellesley College. Revised April 2002. Available at: http://www.nber.org/papers/w8893

(18) Witte, A.D., & Queralt, M. (March 2002).  Take-Up Rates and Trade Offs After the Age of Entitlement: Some Thoughts and Empirical Evidence for Child Care Subsidies.  Working Paper.  Cambridge, MA: National Bureau of Economic Research.vailable at: http://www.nber.org/papers/w8886