children playing

Child care subsidies and the transition from welfare to work

Printer-friendly versionSend by emailPDF version
Danziger, Sandra K.; Ananat, Elizabeth Oltmans and Browning, Kimberly G.
Publication Date: 
1 Nov 2003

Available in print for order (see SOURCE) and online for download.

Access to subsidized child care is an important concern for many women moving from welfare to work. Because access to a subsidy program varies by state, here we describe the policy context in Michigan, where the study was conducted. We examined whether demographic characteristics and other factors that may affect work differed by child care use and subsidy receipt. We assessed whether subsidies reduced child care problems and increased a woman's percent of months worked and monthly earnings. Using data from the Women's Employment Study (WES), a random sample panel survey of women who received welfare, we drew policy and program implications regarding how child care financial assistance can better promote the welfare reform objective of self sufficiency through employment.

We examined how the policy operates, whether child care problems differ by subsidy receipt and the effect of subsidy on work. Data are from a random sample panel study of welfare recipients post-1996. Findings show that subsidy receipt reduces costs but not parenting stress or problems with care. It predicts earnings and work duration net of other factors. Increased use of subsidies by eligible families and greater funding for childcare would help meet the demand for this important support for working poor families.