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Income and Employment Fluctuations among Low-Income Working Families and Their Implications for Child Care Subsidy Policy

Publication Date

This brief explores income and employment patterns of working families, potentially eligible for Child Care and Development Fund (CCDF) subsidies, over a 12-month period.  Analysis of the 2008 panel of the Survey of Income and Program Participation (SIPP) waves 8 to 11 (early 2011 to early 2012) followed a group of families who were assumed to be “eligible” for CCDF subsidies because they were working and their household income fell below 85 percent of the state median income.  The analysis followed this group across a 12-month period, observing their work and income status at four, eight, and twelve months later.  Findings reveal that income and employment do fluctuate for many families, who experience brief job losses or periods of increased income, only to return to work or to a lower income level within a few months’ time.  The brief discusses implications for subsidy authorization, eligibility redetermination and reporting policies.  Key findings include:

  • More than three-quarters (78 percent) of children who initially qualify for CCDF under state eligibility rules are still eligible when checked at later time points during the entire 12-month period.
  • In many working families with limited incomes, parents or guardians lose jobs only to return to work again within the 12-month period.  Likewise, many families whose income rises above 85 percent of their state’s median income (SMI) see their income fall below that level later in the same 12-month period.  
  • Fewer than 3 percent of children who are initially eligible for CCDF would be ineligible if reassessed at each of the three later time points, either because their parents or guardians stop working or looking for work, or their family income increases above 85 percent of SMI.
Low-Income Populations | Children