Association for Public Policy Analysis & Management

Dependable, quality, and affordable care is closely related to family work stability and income and children’s development (Capizzano & Adams, 2000; Han & Waldfogel, 2001). Conversely, frequent or sudden disruptions in care are detrimental to children’s health and well-being and compromise parent’s employment security and family income, especially for low-income and single-parent families (Adams & Rohacek, 2010; OECD, 2006).  The Child Care and Development Fund (CCDF) block grant provides funding for states to offer subsidized child care to families who are low income or receiving welfare.  Thus, a central concern in the research on CCDF is whether and how states can structure policies that facilitate stable care coverage for vulnerable families and those transitioning from welfare to work.

            States have substantial authority over CCDF in determining the income requirements for eligibility, provider reimbursement rates, parent sliding-scale copayment amounts, and the initial application and recertification procedures. As a result, fifty different versions of CCDF subsidy policies exist in the U.S. today, with very limited, and primarily descriptive, research on how these policy bundles influence low-income families. For example, states might set policies that increase administrative burden for parents through onerous redetermination and reporting requirements (Heinrich 2015), or provide them with limited purchasing power (through low reimbursement rates) to secure a stable, formal care arrangement; these policy features may cause lapses in subsidy coverage and, in turn, care disruptions.

            In our study, we examine five key CCDF policy dimensions that most closely relate to stability in children’s care through the CCDF program: 1) length of eligibility redetermination period and 2) reporting requirements for income changes (i.e., administrative burden), 3) differences in initial and continuing eligibility income requirements that allow for income growth, 4) provider reimbursement rates and 5) parent copay amounts (i.e., generosity).  Our outcome variable is the length of children’s continuous enrollment in the subsidy program—referred to as care “spells”—a common metric by which state CCDF policy has been evaluated.  We exploit states’ changes in these policy dimensions during a 4-year period (2009-2012) with state fixed effects analyses to address endogeneity.  We use a unique combination of data from the CCDF Policies Database (Urban Institute), monthly administrative survey data from CCDF families on spell length, copay amounts, and care type (Administration for Children and Families), and a set of state policy characteristics derived from several sources to control for time-varying state political, social, and economic conditions.   

            Preliminary analyses indicate that both longer redetermination periods and differences in initial and continuing income eligibility were positively related with CCDF spell length.  Parent copay amount was also related to CCDF spell length, but may be due to the association between copay amounts and provider reimbursement rates.  This may suggest that both copays and reimbursement rates represent better overall purchasing power for reliable and quality care. Because prior studies on spell length use data from one state or a handful of states and are primarily correlational, our study’s strong research design and use of nationally representative data make it a particularly important contribution.