Subsidized and high-quality child care, but for whom?

Child Care and Development Fund (CCDF) Subsidies are among the most crucial policy instruments in the United States to help low-income parents pay their expenses for non-parental child care and early education and help childcare providers cover their costs. Racial and ethnic differences in access to subsidized child care persist under CCDF, yet the role of specific state eligibility rules in producing these disparities remains unclear. This study exploits inter-state policy differences to compare the eligibility and uptake of households by race and ethnicity under alternative policy regimes. In light of prior research on CCDF, this paper argues that employment-based subsidies with a long list of eligibility criteria, like being in different approved activities and varying income thresholds, have varying impacts on different households based on race and ethnicity. To do so, the paper explores the current policy and then examines the characteristics of eligible recipients, eligible non-recipients, and non-eligible but in-need families in each state. Upon identifying these three groups, whether there is an overrepresentation of any racial or ethnic groups within them is assessed by closely analyzing their subsidy status. The National Survey of Early Care and Education (NSECE, 2019) and CCDF Policy Database (2018) are utilized through logistic regressions. The paper found that among low-income households, Black households are more likely to meet eligibility criteria, whereas Hispanic/Latinx households are less likely to meet them compared to white households. However, regarding take-up rates, Black households do not significantly differ from white households, while Hispanic/Latinx households exhibit lower take-up rates than their white counterparts. The lower take-up rates of Hispanic/Latinx households are attributed to their residence in states with low take-up rates. Overall, this paper shows how state policy surrounding eligibility can coincide with the disparity in households’ eligibility and uptake by race and/or ethnicity in each state.