IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/8886.html
   My bibliography  Save this paper

Take-Up Rates and Trade Offs After the Age of Entitlement: Some Thoughts and Empirical Evidence for Child Care Subsidies

Author

Listed:
  • Ann Dryden Witte
  • Magaly Queralt

Abstract

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.

Suggested Citation

  • Ann Dryden Witte & Magaly Queralt, 2002. "Take-Up Rates and Trade Offs After the Age of Entitlement: Some Thoughts and Empirical Evidence for Child Care Subsidies," NBER Working Papers 8886, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8886
    Note: CH LS PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w8886.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
    2. Pamela Loprest & Stefanie Schmidt & Ann Dryden Witte, 2000. "Welfare Reform under PRWORA: Aid to Children with Working Families?," NBER Chapters, in: Tax Policy and the Economy, Volume 14, pages 157-203, National Bureau of Economic Research, Inc.
    3. Dahlia K. Remler & Jason E. Rachlin & Sherry A. Glied, 2001. "What can the take-up of other programs teach us about how to improve take-up of health insurance programs?," NBER Working Papers 8185, National Bureau of Economic Research, Inc.
    4. Patricia M. Anderson & Bruce D. Meyer, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 913-937.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ann Dryden Witte & Magaly Queralt, 2003. "Impacts of Eligibility Expansions and Provider Reimbursement Rate Increases on Child Care Subsidy Take-Up Rates, Welfare Use and Work," NBER Working Papers 9693, National Bureau of Economic Research, Inc.
    2. Chris M. Herbst, 2023. "Child Care In The United States: Markets, Policy, And Evidence," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 255-304, January.
    3. Julio J. Guzman, 2019. "The demand for child care subsidies under rationing," Review of Economics of the Household, Springer, vol. 17(4), pages 1349-1379, December.
    4. James J. Heckman & Jeffrey A. Smith, 2004. "The Determinants of Participation in a Social Program: Evidence from a Prototypical Job Training Program," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 243-298, April.
    5. Erus, Burcay & Yakut-Cakar, Burcu & Cali, Sanda & Adaman, Fikret, 2015. "Health policy for the poor: An exploration on the take-up of means-tested health benefits in Turkey," Social Science & Medicine, Elsevier, vol. 130(C), pages 99-106.
    6. Jekaterina Dmitrijeva & Florent Fremigacci & Yannick L’Horty, 2015. "Le paradoxe des nouvelles politiques d’insertion," Revue d'économie politique, Dalloz, vol. 125(4), pages 475-498.
    7. Colm Harmon & Claire Finn & Arnaud Chevalier & Tarja Viitanen, 2006. "The economics of early childhood care and education : technical research paper for the National Economic and Social Forum," Open Access publications 10197/671, School of Economics, University College Dublin.
    8. Johnson, Anna D. & Martin, Anne & Brooks-Gunn, Jeanne, 2011. "Who uses child care subsidies? Comparing recipients to eligible non-recipients on family background characteristics and child care preferences," Children and Youth Services Review, Elsevier, vol. 33(7), pages 1072-1083, July.
    9. Herbst, Chris M. & Tekin, Erdal, 2012. "The geographic accessibility of child care subsidies and evidence on the impact of subsidy receipt on childhood obesity," Journal of Urban Economics, Elsevier, vol. 71(1), pages 37-52.
    10. Herbst, Chris M., 2022. "Child Care in the United States: Markets, Policy, and Evidence," IZA Discussion Papers 15547, Institute of Labor Economics (IZA).
    11. Ha, Yoonsook & Meyer, Daniel R., 2010. "Child care subsidy patterns: Are exits related to economic setbacks or economic successes?," Children and Youth Services Review, Elsevier, vol. 32(3), pages 346-355, March.
    12. Herbst, Chris M., 2008. "Who are the eligible non-recipients of child care subsidies?," Children and Youth Services Review, Elsevier, vol. 30(9), pages 1037-1054, September.
    13. Prell, Mark A. & Finifter, David H., 2013. "Participation in the Supplemental Nutrition Assistance Program (SNAP) and Unemployment Insurance How Tight Are the Strands of the Recessionary Safety Net?," Economic Research Report 160453, United States Department of Agriculture, Economic Research Service.
    14. Finifter, David H. & Prell, Mark A., 2013. "Participation in SNAP and Unemployment Insurance: How Tight Are the Strands of the Recessionary Safety Net?," Economic Research Report 262216, United States Department of Agriculture, Economic Research Service.
    15. Ann Dryden Witte & Marisol Trowbridge, 2005. "The Structure of Early Care and Education in the United States: Historical Evolution and International Comparisons," NBER Chapters, in: Tax Policy and the Economy, Volume 19, pages 1-38, National Bureau of Economic Research, Inc.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James J. Heckman & Jeffrey A. Smith, 2004. "The Determinants of Participation in a Social Program: Evidence from a Prototypical Job Training Program," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 243-298, April.
    2. Jonathan Gruber, 2008. "Covering the Uninsured in the U.S," NBER Working Papers 13758, National Bureau of Economic Research, Inc.
    3. Jonathan Gruber, 2008. "Covering the Uninsured in the United States," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 571-606, September.
    4. Kroft, Kory, 2008. "Takeup, social multipliers and optimal social insurance," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 722-737, April.
    5. Dan A. Black & Mark C. Berger & Jeffrey A. Smith & Brett J. Noel, 1999. "Is the Threat of Training More Effective Than Training Itself? Experimental Evidence from the UI System," University of Western Ontario, Departmental Research Report Series 9907, University of Western Ontario, Department of Economics.
    6. Ann Dryden Witte & Magaly Queralt, 2003. "Impacts of Eligibility Expansions and Provider Reimbursement Rate Increases on Child Care Subsidy Take-Up Rates, Welfare Use and Work," NBER Working Papers 9693, National Bureau of Economic Research, Inc.
    7. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
    8. Gautier, Pieter & van Vuuren, Aico & Siegmann, Arjen, 2007. "The Effect of the Theo van Gogh Murder on House Prices in Amsterdam," CEPR Discussion Papers 6175, C.E.P.R. Discussion Papers.
    9. James J. Heckman, 1991. "Randomization and Social Policy Evaluation Revisited," NBER Technical Working Papers 0107, National Bureau of Economic Research, Inc.
    10. Raj Chetty, 2005. "Why do Unemployment Benefits Raise Unemployment Durations? Moral Hazard vs. Liquidity," NBER Working Papers 11760, National Bureau of Economic Research, Inc.
    11. Belot, Michèle & James, Jonathan, 2014. "A new perspective on the issue of selection bias in randomized controlled field experiments," Economics Letters, Elsevier, vol. 124(3), pages 326-328.
    12. Nicola Pavoni & G. L. Violante, 2007. "Optimal Welfare-to-Work Programs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(1), pages 283-318.
    13. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, August.
    14. David W. Emmons & Eva Madly & Stephen A. Woodbury, 2005. "Refundable Tax Credits for Health Insurance: The Sensitivity of Simulated Impacts to Assumed Behavior," Upjohn Working Papers 05-119, W.E. Upjohn Institute for Employment Research.
    15. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    16. Barbara Sianesi, 2002. "Swedish active labour market programmes in the 1990s: overall effectiveness and differential performance," IFS Working Papers W02/03, Institute for Fiscal Studies.
    17. Kim, Jinyoung & Kim, Seonghoon & Koh, Kanghyock, 2022. "Labor market institutions and the incidence of payroll taxation," Journal of Public Economics, Elsevier, vol. 209(C).
    18. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    19. Brian Graversen & Brian Larsen, 2013. "Is there a threat effect of mandatory activation programmes for the long-term unemployed?," Empirical Economics, Springer, vol. 44(2), pages 1031-1051, April.
    20. Yokoyama, Izumi & Kodama, Naomi & Higuchi, Yoshio, 2019. "Effects of state-sponsored human capital investment on the selection of training type," Japan and the World Economy, Elsevier, vol. 49(C), pages 40-49.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H40 - Public Economics - - Publicly Provided Goods - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:8886. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.