In this paper we develop a model of an eligible family's decision to take or not to take child care subsidies. This decision depends on the net benefits the family expects to derive from the subsidies over their expected duration. We contend that such a demand-side model for the take-up of child care subsidies and use of the term 'take-up' rate are only appropriate for programs that guarantee services to all eligible applicants. After welfare reform, most states do not offer such guarantees. For states that do not guarantee subsidies, the proportion of the eligible population that receives subsidies is better called a service rate than a take-up rate. Modeling service rates requires consideration of both governments' decisions (the supply side) and families' decisions (the demand side) regarding child care subsidies. We survey the general literature on take-up rates for social welfare programs and review existing estimates of the take-up rates and service rates for child care subsidy programs in various states. Using administrative data and survey data for states that guarantee subsidies for all eligible families, we estimate the family-level take-up rate for child care subsidies to be around 40% in early 2000. For states that do not guarantee subsidies, service rates range from 14% in Minnesota to 50% in Massachusetts. Finally, we suggest indicators to assess the trade offs that governments are making when designing and funding their child care subsidy programs. We use the percent of federally eligible families that receive child care subsidies and public expenditures per subsidized child to discern the relative importance that states place on using child care subsidies (1) to facilitate parental work and (2) to prepare its future work force by improving services to low-income children. For Rhode Island, we find increasing emphasis on the latter between 1996 and 2000. We also find that the Illinois subsidized child care program places relatively more emphasis on parental work facilitation, while Minnesota's program makes a more substantial investment in children through relatively more comprehensive and in-depth services.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
8886.
Length: Date of creation: Apr 2002 Date of revision: Handle: RePEc:nbr:nberwo:8886
Note: CH LS PE Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs H40 - Public Economics - - Publicly Provided Goods - - - General
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)