Welfare to Work and Child Care Selection

Public spending on childcare and preschool has grown dramatically in recent years, rising nationwide from $6.8 to $14.3 billion between 1995 and 2000. In California, the childcare and early education budget has almost quadrupled, from $800 million in 1996 to $3.1 billion in the current fiscal year.

Yet the share of low-income families who actually draw public child care support—for preschool or school-age programs—remains highly variable across states and communities. And little is known about the characteristics of families who are more likely to use child care subsidies, especially after 1996, as more parents faced pressures to move from welfare to work.

To broaden parental choice, policymakers have supported expansion of both center- and home-based childcare options. But we have not well understood how the expansion of one form of care may influence the actual choices made by parents moving from welfare to work, many of whom rely on less formal, licensed-exempt providers.

This paper reports on subsidy use and selection patterns for 1,974 parents in three California counties. All had successfully moved from cash aid to jobs or work activities under the state CalWORKs program in 2000–2001, and therefore needed childcare. All sampled parents—residing in Kern, Orange, or Santa Clara county—were eligible for childcare aid when they were initially sampled.