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Child care subsidies help low-income families defray some or all of the costs of purchasing care from child care providers in the larger child care market. Public funding for subsidies grew during the 1990s in large part because they were essential to welfare reform (as they help low-income parents work) and because they can also play a role in the development and safety of low-income children. While the system is based on parents being able to find child care providers willing to accept subsidies, relatively little is known about how providers experience the subsidy system, and the effects of subsidy policies and practices on provider's willingness and ability to participate. These issues are particularly important because one of the cornerstones of the federal child care program — the Child Care and Development Fund (CCDF, also known as Child Care and Development Block Grant) — is the principle that families receiving subsidies should have "equal access" to child care that is comparable to the care available to nonsubsidized children.
This brief (and the larger report upon which it is based) takes initial steps toward filling the gap in our knowledge of child care providers. Based on interviews and site visits in 17 sites in 1999, it examines subsidy policies and practices that can shape the experiences of providers serving subsidized children — particularly those that affect how much a provider receives in payment and a provider's overall experience with the subsidy system. According to our research, these issues may ultimately affect the willingness of providers to participate in the subsidy system, as well as the quality of care they provide and their financial stability.