A record number of low-income families currently receive child care subsidies from the Child Care and Development Fund program (CCDF). In 2010, the CCDF spent $7.1 billion to subsidize the care of approximately 1.6 million children in an average month (U.S. Department of Health and Human Services, n.d.). Accordingly, about 75% of children from low-income working-mother families spent an average of 35 hours/week in non-parental child care (Laughlin, 2010).

Despite an increasing number of studies examining child and family outcomes related to subsidy use, only one previous study has examined whether child care subsidy use is linked to child obesity. Using individual data, Herbst and Tekin (2011) find that kindergarten children who had previously received subsidized care had significantly higher BMIs and were more likely to be overweight or obese. No study has specifically addressed how state-level child care subsidy policies that shape parental choices on care type may affect rates of child obesity across states.  Given that nearly one third of children are overweight or obese (Ogden et al., 2012), and low income children are more likely to be overweight or obese (CDC, 2011), it is important to identify whether state child care subsidy policies can be leveraged to help reduce the prevalence of obesity for low income children.

In general, state subsidy policy regimes tend to either promote parental choice by allowing parents the greatest range of options for subsidized care or high quality care by directing subsidies to center-based child care, which tends to be the most structured and subject to the greatest number of regulations. Thus, at least two aspects of subsidy spending are relevant to obesity: the proportion of subsidies directed to various types of care (centers, large child care homes, small child care homes); and, the proportion of subsidies directed to regulated care settings. This study uses annual  state CCDF reports from 2001 to 2010 to investigate whether the percentage of subsidies used in different care types and the percentage that go to regulated care settings were related to rates of child obesity. State obesity rates for children zero to four are calculated using data from the Pediatric Nutrition Surveillance System (PedNSS), which collects annual data on low-income children who are served by federally-funded public health programs,  a group particularly likely to be eligible for subsidies.

Results from state- and year-fixed effects models indicate that increases in the proportion of subsidies used for center-based care were associated with increases in state rates of obesity, while increases in the proportion of subsidies used for large home care were associated with decreases in state rates of obesity. Further, the proportion of subsidies used for regulated care was associated with decreases in obesity rates. Because types of care are often subject to different levels of regulations, additional analyses will examine how the interaction between the proportion of subsidies used for regulated care and the proportion of subsidies used for each type of care is related to child obesity.