|Decision Makers:||State Government Grantmakers Nonprofit Leaders|
|Population Reach:||10-19% of WI's population|
|Impact on Disparities:|
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Child care subsidy programs provide financial assistance to working parents or, in some cases, parents attending school, to cover the costs of certified in-home or center-based child care. Child care subsidies are usually available to low income families; eligibility criteria vary by state.
There is strong evidence that child care subsidies increase employment (Ahn 2012, NCCP-Schaefer 2006, Tekin 2005, Kimmel 1995) and earnings for low income families (Ahn 2012, NCCP-Schaefer 2006, Kimmel 1995). Such subsidies have also been shown to increase low income children’s enrollment in center-based care, which is often higher quality than non-family home-based care (Weber 2014, Ertas 2012, Michalopolous 2010).
Child care subsidies increase employment for single mothers (Ahn 2012, NCCP-Schaefer 2006, Tekin 2005, Kimmel 1995) especially those with low income (Ahn 2012, NCCP-Schaefer 2006, Kimmel 1995) and those without a high school education (NCCP-Schaefer 2006). Single mothers who receive subsidies work more hours, have more standard work schedules, stay in jobs longer, and earn more than mothers who do not receive subsidies (NCCP-Schaefer 2006).
Subsidy receipt may increase the likelihood that a single mother enrolls in school or job training (Herbst 2011). Sliding scale subsidies, including subsidies requiring co-payments, may be nearly as effective as full subsidies in increasing employment of single mothers (Kimmel 1995).
Child care subsidies can allow employed parents to access child care centers (Michalopolous 2010) and center-based preschool programs (Ertas 2012) that they may not have been able to afford without subsidies, and may increase use of center-based care (Johnson 2013). More generous subsidies may increase the use of center-based care more than less generous subsidies (Weber 2014). Norway-based research indicates that subsidies that move children from informal, non-parental care to more formal care settings can have positive long-term effects on children's future educational attainment and labor market participation (Havnes 2011).
A recent report projects that expanding the child care subsidy to all eligible families below 150% of the poverty line would reduce child poverty by 3% (300,000 children). This change would nearly double the number of families receiving subsidies, and cost approximately $5.3 billion (CDF 2015).
The federal Child Care and Development Fund provides funding to states, territories, and tribes to help low income families, families receiving temporary public assistance, and those transitioning from public assistance obtain child care so parents can work or attend education/training programs (US DHHS-CCDF).
Like many other public benefits, qualification for child care subsidies is based on income. The federal income threshold is set at or below 85% of state median income, but states can set lower thresholds (US DHHS-CCDF). More than two-thirds of states have child care subsidy eligibility limits under 200% FPL (NCCP-Fass 2008), which is $48,600 for a family of four in 2015 (US DHHS-Poverty). States with more stringent Temporary Assistance for Needy Families (TANF) work requirements often have lower income eligibility limits and less generous child care subsidies than states with less stringent work requirements (Ha 2013).
Working Wisconsin families with gross incomes below 185% of the federal poverty level are eligible for Wisconsin Shares, which helps families pay for child care for children under the age of 13 (WI DCF-Shares).
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