Child Care and Welfare Reform: Child Care Subsidy Utilization and Effects on Employment

1
Child Care and Welfare Reform Child Care Subsidy
Utilization and Effects on Employment

• Anne Shlay, Visiting Professor, Department of
  Geography and School of Public Policy, Hebrew
  University
• Professor of Sociology, Temple University
• http//astro.temple.edu/ashlay

2
Outline

• The new welfare reform and implications for child
  care
• The quality issue
• Design and data collection
• The Subsidy Utilization Study
• The Employment Outcomes Study
• The Factorial Survey Study
• Welfare, child care and employment in Israel
  discussion

3
Welfare Reform in the U.S.

• 1996 Personal Responsibility and Work
  Opportunities Reconciliation Act (PRWORA)
• Change welfare as we know it.
• Previous welfare benefits Aid to Families with
  Dependent Children (AFDC)
• New welfare benefits Temporary Aid to Need
  Families (TANF)

4
Employment and Welfare Reform

• Ended welfare as an entitlement program
• Work requirement after two years of receiving
  cash assistance
• Five year total life time limit for receiving
  cash assistance.
• Key element Work requirement after two years of
  receiving cash assistance

5
Supporting work the transition off of welfare

• PRWORA accompanied by large federal
  appropriations to support transition from welfare
  to work
• Overall appropriations 30 billion
• Support for states to operate own programs
• Range of services include education and job
  training, transportation and child care

6
Child care and welfare reform

• Most AFDC/TANF recipients single mothers with
  very young children
• To attend education/employment programs and to
  work, requires child care to free up mothers
  time
• Child care subsidies critical component of
  welfare reform
• Government pays for child care while low income
  women prepare for and enter the labor market

7
Federal support for child care subsidies

• Billions of dollars for child care subsidies
• Mostly federal but some state dollars
• Debate over whether support adequate to meet need
• As policy issue welfare reform given child care
  issue more support, public visibility and
  political leverage than ever before.

8
Child care subsidies and welfare reform two goals

• Support child care while families (mothers) in
  training, education or work programs to assist
  transition off of welfare while receiving TANF
• Support child care for families (mothers)
  immediately after they stop receiving TANF to
  support employment and impede return to welfare
• Key element Child care subsidies intended to
  support welfare recipients make permanent
  transition into labor market

9
Important caveat germane to U.S. Child care
politics

• Mothers being told that they should stay home
  with children.
• Guilt syndrome associated with legitimate
  concerns over quality of care
• Major divisions by race and class
• Middle class married women may have choices to
  stay home or stay in the labor market. Can also
  afford better quality care
• Low income women told not to stay home. Must
  enter the labor market. Must use child care
  system, regardless of quality.

10
The quality issue major issue in U.S.

• Child care market does not deliver quality care
• Studies of quality (direct observation of care
  and proxies for quality) show most care low to
  mediocre quality

11
Why low quality?

• Poor remuneration poverty wages
• High turnover (33 annually)
• Low education levels
• Poor training
• Informal market
• Minimum regulations
• Absence of regulation enforcement
• Feminization of care work concentration of women
• Cost of care tied to womens wage (lower than
  mens)
• Patriarchy/sexism

12
Two tiered market

• Formal market regulated market
• Informal market unregulated market

13
Formal market regulated market

• State regulations regulate minimum class size,
  child/staff ratios, educational credentials, and
  minimum standards for safety and sanitation
• Regulations do not mandate quality. Provide
  floor for quality
• Includes child care centers (gt12 kids), family
  day care homes (3-5, 6-12 kids), legally
  unregulated care (1-3 kids)

14
Informal market

• Unregulated family day care homes
• Neighbor care
• Relative care
• Kith and kin care

15
Quality and the market

• Quality known about formal market
• Informal market underground
• Approximately 50 of child care informal
• Question is quality lower in informal market?

16
Importance of quality

• Early years important years for child development
• Debate about brain development (first three
  years)
• NICHD Study of Early Child Care
• Quality affects development outcomes and school
  readiness (over and above family characteristics)
• Impact of quality higher for lower income
  children than higher income children
• Quality child care (perhaps) more important for
  lower income kids than higher income kids

17
Child care as low income family intervention

• Child care potentially mechanism for improving
  developmental outcomes for young children
• May support school readiness and later learning
  ability
• Could be mechanism for improving life chances of
  low income children/families
• Reduce socio-economic difference by race,
  ethnicity and class

18
Welfare leavers study

• Designed to look at child care subsidy
  utilization, employment outcomes and child care
  preferences of welfare leavers
• Funded by two major foundations

19
Policy partners

• Pennsylvania Department of Public Welfare
  welfare and child care agency
• Advisory board of major child care actors
  including practitioners and advocacy (NGO)
  organizations
• Goal do research and make into policy quickly.
• Therefore government and advocate partners

20
Initiated three empirical studies

• Subsidy utilization study
• Employment outcomes study
• Child care preferences factorial survey study

21
Subsidy utilization Study. Telephone survey
(time 1)

• Welfare leaver utilization of child care
  subsidies when leaving welfare system
• Transition process from one subsidy system to
  another
• Barriers to subsidies
• Factors that influence the acquisiton and
  utilization of subsidies

22
Employment outcomes study telephone survey (time
2)

• Interviewed welfare leavers 6-8 months later
• Examine acquisition and maintenance of employment
• Impact of child care subsidies on welfare
  leavers ability to sustain employment

23
Factorial survey study in person interviews
(time 3)

• Examine child care preferences
• Look at whether child care subsidies permit child
  care use congruent with preferences

24
Race and ethnicity

• Compared differences by race and ethnicity
• Specifically looked at differences among White,
  Hispanic and African American welfare leavers
• Race and ethnicity structural factors in U.S.
  society
• Distributes rewards, outcomes and opportunities
• Dimensions of inequality both within and between
  classes

25
Race and ethnicity as cultural factors

• Believed to be related to child care use and
  subsidy use
• Related to attitudes, preferences and behaviors
  vis a vis child care and child care subsidies
• Look at differences among race and ethnicity

26
Overall study design

• Comparative and longitudinal
• Sample of White, African American and Hispanic
  welfare leavers
• Sampled from lists of welfare leavers provided by
  Department of Public Welfare
• Stratified random sample random sample from
  three strata defined by race and ethnicity

27
Final sample

• 658 welfare recipients
• African Americans 228
• White 215
• Hispanic 215
• Time 1 Overall response rate 66 (similar
  across all groups)
• Time 2 36 of study respondents from time 1.

28
Subsidy utilization study Preliminary findings
on subsidy and child care use

• Less than one third used a child care subsidy
  after leaving welfare
• Large number (30) used unsubsidized care
• Largest group (40) used no form of regular child
  care
• African Americans used child care subsidies at
  twice the rate of White or Hispanic welfare
  leavers

29
Employment outcomes study preliminary findings

• Continuity in use of subsidized care over time
  (61 received subsidies at time 1 and time 2)
• Continuity in employment (94 employed at time
  one were employed at time 2)
• Having child care subsidies increased probably of
  employment by 139

30
Factorial survey Design

• Method to examine preferences for complex,
  multidimensional phenomenon
• Factor out different components of
  multidimensional phenomenon
• Goal look at the impact of different components
  on overall preferences for multi-dimensional
  phenomena
• Examples housing and neighborhood preferences,
  household prestige, crime seriousness, sexual
  harassment, racial prejudice.

31
Random assignment to short stories vignettes

• Determine discrete items that make up
  multidimensional phenomena dimensions (type of
  variable)
• Determine levels within dimensions (values of
  variables)
• Have computer randomly assign levels to short
  stories (vignettes)
• Ask overall rating question desirability
• Use multivariate technique to assess independent
  contribution of each level on net changes in
  desirability.

32
Examples of dimensions and levels

• Type of care
• a. center care
• b. family day care
• c. relative cared. neighbor care
• Location of care
• a. in your home
• b. not in your home
• Relationship to care provider
• a. care by a relative
• b. care by a neighbor
• c. care by a friend
• d. care by a professional

• Familiarity with care provider
• a. someone you have known for a long time
• b. someone you have not known for a long time
• License
• a. is licensed  
• b. is unlicensed
• c. blank 
• Group size 
• a. provides care for children in smaller groups 
• b. provides care for children in larger groups  

33

• Sample Child Care Vignette
• This is a relative care arrangement in the
  relative's home that is a 15-minute commute from
  home to child care and 30-minute commute from
  child care to work. The arrangement is
  accredited. It accepts subsidized children and
  offers care during the evenings and weekends.
• The care provider has some training in child
  care. The care provider does not have any
  experience taking care of children in a child
  care setting.
• The care provider is not warm but strict. The
  children receive a lot of individual attention.
• The program has planned activities for learning
  and playing.
• The care provider always makes sure that
  everything appears to be clean and safe for the
  children. The children cared for are racially
  mixed and are mostly children from high income
  families. Most of the children are receiving a
  subsidy to help pay for the cost of care.
• __________________________________________________
  ____________________
• Please circle the number that best corresponds
  with your answer.1. How much would you like
  this child care for you and your family?
• Not at all
  
  Very much
• 1------------2-----------3-----------4-----------
  5-----------6-----------7-----------8-----------9
  
• 2. In your view, what would be a fair weekly
  price for this child care? Please disregard
  whether or not you could afford the fair price.
• 0 lt20 21-40 41-60 61-80
  81-100 101-120 121-140 141-160
  161-180 gt181
• 1------2------------3------------4------------5---
  ---------6---------------7----------------8-------
  ---------9--------------10----------11
• 3. How much would you be willing to pay per
  week for this child care?

34
Factorial Survey Analysis

• Assess contribution of impact of having a
  license not have a license, center care versus
  family care.
• Also assesses overall contribution of dimensions,
  e.g. effect of regulations, child care provider
  interactions
• Applications to multiple set of issues

35
Child care and welfare reform

• The Israeli context??