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This paper provides an early analysis of child care subsidies under welfare reform. The authors review the literature on child care subsidies and discuss the potential for such subsidies to be an effective part of the effort to make low-income families economically self-sufficient. Previous studies of child care subsidies use data from the pre-welfare-reform period. The authors discuss the potential difficulties in drawing inferences from those studies that can be applied to the very different post-reform environment. The authors use the data to address two issues: - First, how do household characteristics and state subsidy rules and expenditure affect the likelihood of receiving a subsidy? Key household characteristics include family size and structure, and past participation in welfare. - Second, how does subsidy receipt affect employment and welfare participation?