Child Care Subsidy Duration and Caseload Dynamics: A Multi-State Examination. Discussion

10/01/2014

The statistics presented in this report provide a description of the interval of time that families receive child care subsidies and document the calendar months when they are more or less likely to enter and exit the programs. These statistics are useful to researchers and policymakers because the patterns may be related to adult employment and child care stability outcomes, and they provide valuable information to program administrators who want to better understand the caseload dynamics of the subsidy programs.

The methodology used to analyze subsidy durations was somewhat different than what was used in other reports. This report used families as units of analysis, whereas many other studies used children as units of analysis.17 The data examined also were more recent than most of what has been previously analyzed. Despite differences in methodologies across studies the results presented in this report were similar to what has been previously documented in the extant literature. Families often receive child care subsidies for relatively short periods of time; the median spell durations were between four and eight months for the majority of 35 states examined in this report. Similar to previous studies, this report finds that families frequently return to the subsidy programs after they exit and measurements that take into account multiple spells of participation reveal much longer periods of participation than measurements of single spells. For example, whereas the median duration of a single spell of participation was six months for the combined 35 states, the median cumulative usage over a 36-month measurement period was 12 months.

Since the ACF-801 data does not collect information on the employment situations of the families before and after they receive subsidies, and since it lacks information about the non-subsidized care arrangements of the participating families, it is challenging to determine why these patterns occur and it is difficult to identify whether the breaks in subsidy usage coincide with a discontinuity of the child care arrangements or the employment of the parents. Many of the important policy questions that policymakers want to rigorously answer concerning subsidy duration will likely require innovative research designs, and possibly more data collection, that goes beyond descriptive analysis of administrative data. For example, it will be difficult to use only administrative data to determine whether redetermination policies, reimbursement rates, maximum income eligibility thresholds, and earned income disregards impact employment and child care stability. Studies that link subsidy durations with employment records provide some insight into this topic, but even these studies are limited by the fact that the direction of causation between child care arrangements and changes in employment is not always clear.

Part of the challenge of studying subsidy programs is that they are funded by block grants such as the Child Care and Development Fund (CCDF), Social Services Block Grant (SSBG), and money spent directly from the Temporary Assistance for Needy Families (TANF) program. Much of the funding available to states through TANF and SSBG can be used for a variety of social service priorities and states vary in the amount of funding they allocate to child care subsidy programs. Without a clear entitlement funding structure, states must balance between a series of competing priorities. Some states prefer to broaden their eligibility parameters to families with somewhat higher incomes, while other states choose to implement more restrictive eligibility guidelines but provide higher reimbursement rates to the providers, which theoretically increase the care options available to the participating families. Some states choose to fund most or all eligible families that apply for subsidies, while other states control costs by operating waiting lists or by freezing enrollment.

The challenges to studying child care subsidy programs should not deter researchers from pursuing further quantitative analysis of caseload patterns using administrative data. There are likely additional patterns that can be observed that would be helpful to researchers and administrators. For example, further analysis of states with particularly long or short duration patterns might reveal important differences that could be informative to policymakers. However, the differences in policies and funding amounts across the states mean that states likely serve different types of populations and linking specific policies to various outcomes is challenging. Researchers may want to consider conducting qualitative interviews with a subset of the subsidy populations. For example, it might be helpful to conduct a survey with a sample of families that exited the subsidy programs to understand the various factors that led to the exits and to what happened to the employment and child care arrangements of the families after they exit the programs.

The challenges to studying child care subsidy programs should not deter researchers from pursuing further quantitative analysis of caseload patterns using administrative data. There are likely additional patterns that can be observed that would be helpful to researchers and administrators. For example, further analysis of states with particularly long or short duration patterns might reveal important differences that could be informative to policymakers. However, the differences in policies and funding amounts across the states mean that states likely serve different types of populations and linking specific policies to various outcomes is challenging. Researchers may want to consider conducting qualitative interviews with a subset of the subsidy populations. For example, it might be helpful to conduct a survey with a sample of families that exited the subsidy programs to understand the various factors that led to the exits and to what happened to the employment and child care arrangements of the families after they exit the programs.


17 The project decided to use families as the units of analysis because the unique identifiers were based on the heads-of-household and not the children. However, future analysis of the ACF-801 data could potentially replicate the statistics in this report using children as the units of analysis by combining the dates of birth of the children with the Social Security Numbers of the heads of household.

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