Policy brief

How to Pay for Child Care?

Local Innovations Help Working Families
Judith E. Carroll
Yale University


Childcare—from high-quality preschools to paid babysitters—commonly costs from $5,000 to $7,000 a year. Many families can’t afford to pay this much, especially parents who are struggling to get off welfare or hold down low-wage jobs.

Financial supports for childcare, aiming to help low-income families, have grown dramatically over the past decade. Yet in many communities, less than one-fourth of all eligible families sign up for these subsidies. In some states, new childcare funds are going unspent. State and local leaders are trying to determine why families are not more eager to participate and how their agencies can become more accommodating.

The policies to determine which families receive subsidies vary tremendously throughout the country. This threatens to preserve disparities in access. The good news is that this dissimilarity is producing a number of innovative ways to help parents take advantage of childcare.

The intent of the What Works series is to examine these variations and provide decision makers with concrete examples of effective programs and policy strategies. This brief is drawn from data obtained through the Growing Up in Poverty Project (GUP), a research effort that recently found highly variable rates of eligible parents using childcare subsidies across five study sites in California, Connecticut, and Florida. This research revealed uneven participation in center-based and childcare voucher programs.

To investigate why these rates were so variable—and to gather ideas for how to increase participation—the authors spoke with county welfare and childcare administrators, advocates and childcare directors. Under highly decentralized family welfare programs, much of the action is local.

This brief first provides background information about the nature and importance of childcare assistance under welfare reform. It then discusses possible reasons for low levels of parental use of subsidies. And finally, it presents the reader with an array of novel strategies devised by local agencies to increase subsidy utilization.

Suggested citationCarrol, J. (2001, April). How to pay for child care? Local innovations help working families [Policy brief]. Policy Analysis for California Education. https://edpolicyinca.org/publications/how-pay-child-care