Facts In Action

A recent study suggests that child care subsidies improve both family and child well-being. Researchers compared the status of 52 working poor families receiving subsidies for child care with 50 demographically matched families on a subsidy waitlist.

The researchers found that child care subsidies may improve low-income mothers' job retention. The employment rate for mothers in the group receiving subsidies was 18 percent higher than the employment rate for mothers who were on the waitlist. While mothers had to be employed to get on the subsidy waiting list, in just a few months one in five mothers on the waiting list had lost her job.

The vast majority of working families in both groups had incomes below the poverty line. However, the working families were better off than those without employment. Working mothers had median monthly incomes of $1,000 - double the median monthly incomes of unemployed mothers on the waiting list. In addition, families on the waiting lists were six times more likely than subsidy families to have incomes less than half the federal poverty threshold. Since subsidies were related to job retention, the differences in poverty rates between the two groups is probably related to differences in maternal employment.

Subsidized families also spent approximately half as much out-of-pocket per week on child care than did the unsubsidized families. The combined effect of higher employment rates, lower child care expenses, and fewer families living in severe poverty indicate that families receiving subsidies were economically better-off compared to families on the waiting list. A consistent finding on the effects of poverty on child well-being is that more severe and longer-lasting poverty has more harmful effects on children. In addition, families with subsidies reported both ease in finding child care and stability of care over time.

Source:
Impacts of Child Care Subsidies on Family and Child Well-Being, F. Brooks, Early Childhood Research Quarterly, Volume 17, Number 4, 2002.

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Facts in Action, May/June 2003