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 women’s wage (lower than men’s) • 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 (>12 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. 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   Examples of dimensions and levels

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 <$20 $21-$40 $41-$60 $61-$80 $81-$100 $101-$120 $121-$140 $141-$160 $161-$180 >$181 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? $0 <$20 $21-$40 $41-$60 $61-$80 $81-$100 $101-$120 $121-$140 $141-$160 $161-$180 >$181 1---------2------------3------------4------------5------------6---------------7----------------8----------------9--------------10-------11

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??