Barriers to Child Care Subsidies :

Barriers to Child Care Subsidies: Reasons Why Low Income Families Do Not Use Child Care Subsidies Anne B. Shlay Marsha Weinraub Michelle Harmon Henry Tran www.temple.edu/cpp

Three Year Investigation • Year 1: Barriers to subsidy • Year 2: Low-income families evaluations of child care situations • Year 3: Child care quality and access to subsidies

Study focus on why families do not use subsidies • Child care affordability: serious problem • Families expenditures > 25% of income • Families at risk of losing employment • Children at risk of poor quality placement

Ripple Effects of Affordability Problems • Child care competes with basic needs (e.g. food and shelter) • Creates unstable employment • Produces insecure workforce • Risks poor developmental outcomes for children • Potential effects on school readiness

Child Care Subsidies • Key ingredient to success of welfare reform • Contribute to family economic well-being • Enable employment • Enable quality care choices • Assist in child development and school readiness

Welfare and Working Poor Subsidies • Welfare related child care subsidies: more like an entitlement • Working poor subsidies: means tested and capped

Working poor subsidies • National estimate: 12-15% of eligible working poor families receiving subsidy • For people leaving welfare, 30% taking subsidies • Subsidies available but not utilized • Why?

Knowledge Deficiencies Unaware of subsidies Believe ineligible for subsidies Believe do not need financial help Subsidy Rejection Subsidy regulations Rules governing eligibility Rules governing care choices Subsidy size Cultural barriers Barriers to Subsidy: 2 Levels

Prior Research: Level 1 Only • Overwhelming lack of awareness • But awareness alone did not mean subsidy use • Families need help, are aware of subsidies, and do not apply for them

Questions • Negative perceptions of system? • Bad experiences with system? • Subsidy regulations as barriers?

Focus Groups Range of reasons Qualitative data to design quantitative indicators Survey Parents Learn about experiences Determine reasons for non-utilization Design and Methods

Focus Groups Four 2 hour focus groups Low income, employed women with very young children Survey Random sample from selected Philly zip codes Respondent eligibility: parent or legal guardian of child < 4 years old, African American, working 25 hours per week Data

Survey Questions • Focus on “target child” – youngest child in household • Subsidy eligibility • Perception of subsidy eligibility • Knowledge of subsidies • Experience with subsidy system • Need help paying for care • Reasons for subsidy non-use when aware

Fielding Survey • Temple Institute for Survey Research • Complicated process • Initial N = 457 respondents • Subsidy eligible = 196 respondents • Receiving subsidy = 131 respondents • Not receiving subsidy = 65 respondents

Subsidy Eligible Respondents • Majority single, never married women, in their twenties • Half high school graduates • One third attended or completed college or vocational school • Compare subsidy recipients with non-recipients • Few differences between groups • Non-recipients: more with partner or spouse • Recipients: more likely to have a legal child support arrangement although both groups had informal arrangements • Recipients: slightly higher income • All low income • Big difference: type of care • Recipients: used center care and licensed care • Non-recipients: used unregulated care

Do not need help paying for care: 25% (N=34) Of these, 68% (N=23) believed ineligible Believed ineligible for subsidy: 46% (N=56) Of those, 77% (N=43) needed help paying for care Reasons for Subsidy Non-use: One

Reasons why eligible families who believe they are eligible and need help do not use subsidies (N=54) Application Process • Hassles with applying 37% • Heard long waiting lists 31% • Bad experiences 29% Other subsidy related • not center care 17% • Current provider 15% • Kid treated different 15% • Court child support 13%

Subsidy Regulation Barriers • Eighty five percent cited at least one regulation-related reason why they did not use a child care subsidy

Knowledge as a Barrier • Series of analysis looked at differences in knowledge of subsidy and TANF regulations • No difference between subsidy users and non-users • Knowledge of eligibility status not related to knowing rules governing subsidy regulations

Predictors of subsidy receipt • Other indictors to explain subsidy non-use besides attitudes and knowledge • Multivariate approach • Look at effects of economic, employment, family, child care and welfare characteristics on child care receipt

Predictors of subsidy receipt • Living with spouse/partner (-) • Higher income (+) • Receiving non-employment income (+) • Court ordered support agreement (+) • Use of center care (+) • Prior receipt of cash assistance (+)

Structural barriers • Economics • Family characteristics • Subsidy regulations • Child care

Why Child Care Subsidy Non-utilization • Believe don’t need help paying for care • Believe ineligible for subsidy • Knowledge of subsidy regulations had no influence on subsidy eligibility beliefs • Subsidy regulation related barriers – hassles • Erroneous beliefs that subsidies would interfere with choice of care • Some stigma related perceptions of subsidies • Less experience with welfare system

Policy Recommendations • Assess methods for informing people about subsidy availability and eligibility • Examine regulatory barriers to subsidy use • Inform families that subsidy use does not constrain choice of care • Question mandating court ordered child support agreements • More research on linkages between subsidy use, child care choices and availability, and employment

Barriers to Child Care Subsidies :