Means-tested child care subsidies, first implemented by the federal government in 1990 and expanded as part of the PRWORA in 1996, were intended to facilitate employment among parents defined as being at risk of welfare enrollment and to enhance developmental outcomes for children in low-income households. While the impact of these programs on poor parents' employment patterns has been examined, little is known about their impact on poor parents' child care decisions. This omission is important because if subsidies do not effect change in poor families' child care arrangements, then they are unlikely to lead to either parental self-sufficiency or improved child well-being. The primary goal of the proposed project is to examine the relationship between federal child care subsidy programs and patterns of child care use among low-income families. The analyses use pooled cross-sections from 1984 to 2002 from the Survey of Income and Program Participation (SIPP) in conjunction with state-level data on program eligibility requirements to: (1) determine whether the expansion of child care subsidy program to poor parents at risk of welfare enrollment has been associated with increased use of paid care by non-welfare, poor parents, (2) assess whether changes in subsidy-eligible families' child care use-levels were more pronounced for some forms of paid care (e.g., center care) than others, and (3) evaluate whether the profiles of subsidy-eligible users of paid care changed as subsidy programs broadened their target constituencies to include families at risk of entering welfare. In the absence of direct data on subsidy up-take, a quasi-experimental approach is used in which change in the child care arrangements of subsidy-eligible families is compared to such change among non-poor families, allowing an indirect assessment of subsidy impact on low-income families' child care use. More generally, the proposed research will shed light on contextual influences and enhance understanding of the effectiveness of social policies designed to influence parents' child care decisions.
