Performance Improvement 2005. Child CARE Subsidy Use and Employment Outcomes of Low-income Mothers During the Early Years of Welfare Reform: a Three-state Study


This study examined the relationship between child care subsidy take-up and employment duration among single mothers who were receiving TANF or who had recently left the TANF program during the early years of welfare reform (1997 to 1999) in three states--Illinois, Maryland, and Massachusetts. The researchers relied exclusively on state individual-level data. Unemployment insurance (UI) wage data was used to identify those who were eligible for the child care subsidy because they had found employment and had wages below the child care subsidy state eligibility threshold. Child care subsidy program data was used to distinguish between those who took the subsidy and those who did not, and UI data to examine the subsequent employment patters of both groups. Major findings included the following: (1) child care subsidy take-up rates among the income-eligible mothers were low never exceeding 35 percent in any of the three states, though noticeably lower in Maryland at 24 percent; and (2) child care subsidy use was strongly correlated with employment retention. Even after controlling for a range of socioeconomic and demographic characteristics of the study population, the researchers found that using a child care subsidy decreased the probability of ending employment over the study period by 43 percent in Illinois, 31 percent in Maryland, and 25 percent in Massachusetts.

PIC ID: 8143; Agency Sponsor: ACF-ACYF, Administration on Children, Youth and Families; Federal Contact: Martinez-Beck, Ivelisse, 202-690-7885; Performer: Chapin Hall Center for Children, University of Chicago, Chicago, IL

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