Study of the Effects of Making Families Eligible for Subsidies In Illinois

1. Study of the Effects of Making Families Eligible for Subsidies In Illinois Draft Results October 2009

2. Research Partners • One of four random-assignment studies that are part of the Child Care Subsidy Evaluation, funded by OPRE • Abt Associates is the prime contractor with partners MDRC and National Center for Children in Poverty • MDRC is taking primary responsibility for the impact study analysis Evaluation of Child Care Subsidy Strategies: Illinois

3. Research Design • Overview: • Illinois Dept of Human Services and the Illinois Action for Children worked closely with us to do the study. Illinois DHS was willing to commit $6 million for the initiative. • Families over income eligibility ceiling in Cook County, IL were randomly assigned to be eligible for subsidies for 2 years. • 1/2 of the program group had a 6-month redetermination period; the other half had a 12-month redetermination period. • 1884 families in the study, includes applicants and re-applicants. • Incomes between 50-65% of SMI ($18,000 - $24,000/year). • Research Questions: • What is the effect of receiving child care subsidies on child care, employment, and income? • What is the effect of extending the redetermination period on the stability of subsidy receipt? • Data Sources: • Administrative records from Unemployment Insurance, public assistance, and child care subsidy program • Telephone interview with parents Evaluation of Child Care Subsidy Strategies: Illinois

4. Data Sources • Baseline data from subsidy application • Data from administrative records • Child care subsidies • Unemployment insurance (employment and earnings) • Public assistance (TANF and Food Stamps) • Data from survey (conducted about two years after random assignment) • Child care history since random assignment (e.g., type, interruptions in care, hours) • Child care reliability, flexibility, satisfaction, and out-of-pocket costs • Employment history since random assignment (e.g., hourly wage, fringe benefits) • Income at the time of the survey • Issues with the survey: varied follow-up period with subsidy group responding earlier & recall and bias issues. We limited the follow-up period and weighted the responses. Evaluation of Child Care Subsidy Strategies: Illinois

5. Parental Child Care Decision-Making: Conceptual Model Family Parent & Child Characteris- tics Parent Values, Beliefs, & Definitions Financial Assistance Used CHANGE OF ELIGIBILITY For CCDF Subsidy Stability Amount Other Financial Assistance Parental Employment Outcomes Opportunities Constraints Barriers (As perceived byparent) Preferences: Dynamic set of parent opinions Community Quantity and quality of child care supply Employment characteristics Social Networks Consumer Education /qualitative information Child CareArrangement(s) Used Number Type Hours Price/costs Stability Perception of Quality Family and Child Outcomes Model comes from merge of products created by Child Care Policy Research Consortium (2003) and the Minnesota Child Care Research Partnership (2008). Evaluation of Child Care Subsidy Strategies: Illinois

6. Please note that these results are preliminary. A final report will be available in the next few months. Evaluation of Child Care Subsidy Strategies: Illinois

7. Context – Characteristics of Families Evaluation of Child Care Subsidy Strategies: Illinois

8. Context – Characteristics of Community • Cook County, IL • Chicago and surrounding areas • Between 2005-2008 Evaluation of Child Care Subsidy Strategies: Illinois

9. Context: Characteristics of the Subsidy at Time of the Study • Income-eligibility ceiling for subsidies in Illinois: 50% of SMI • Illinois serves all eligible applicants • Standard 6-month redetermination period • Co-payment is tied to income and number of children in care Evaluation of Child Care Subsidy Strategies: Illinois

10. Weekly Copayments and Reimbursement Rates in Illinois, 2005 Copayment and provider reimbursement 1 child in care 2 children in care Copayment amounts by income as a percent of state median income ($) Standard child care subsidy eligibility 1 2 8.4% to 12.5% 3 4 12.5% to 16.7% 5 7 16.7% to 20.9% 8 12 20.9% to 25.0% 11 16 25.0% to 29.2% 15 22 29.2% to 33.4% 20 34 33.4% to 37.6% 25 44 37.6% to 41.7% 31 54 41.7% to 45.9% 37 64 45.9% to 50.0% 43 74 Expanded income eligibility for current study 50.0% to 55.0% 49 84 55.0% to 60.0% 55 94 60.0% to 65.0% 61 104 Reimbursement rates ($) Center care Child under 2 1/2 years old 169 338 Child over 2 1/2 years old 122 243 Licensed home care Child under 2 1/2 years old 108 215 Child over 2 1/2 years old 103 205 Unlicensed home care 47 95 SOURCE: MDRC calculations from State of Illinois Department of Human Services. NOTES: Co-Payment and Reimbursement Rates, 2005 Evaluation of Child Care Subsidy Strategies: Illinois

11. Subsidy Receipt Among Program and Control Group Evaluation of Child Care Subsidy Strategies: Illinois

12. Effects of Extended Redetermination Period on Subsidy Receipt Evaluation of Child Care Subsidy Strategies: Illinois

13. Quarters Employed for Program and Control Group Evaluation of Child Care Subsidy Strategies: Illinois

14. Child Care: Program and Control Group Evaluation of Child Care Subsidy Strategies: Illinois

15. Child Care: Program and Control Group Evaluation of Child Care Subsidy Strategies: Illinois

16. Summary of Study • For families in the sample (Cook County, average monthly incomes $2600), eligibility for subsidy receipt did not affect earnings. • Eligibility did affect amount of months subsidy receipt, type of care, satisfaction, amount paid, job-related problems. • This can be thought of a test of a specific group of families of specific aspects of a child care and employment decisionmaking conceptual model. Evaluation of Child Care Subsidy Strategies: Illinois

17. Next Steps • This is one of two random assignment studies testing the effects of subsidy policy “levers.” (Washington co-payment study is the other.) • We need more rigorous tests of different aspects of the conceptual model (experimental, quasi-experimental). • A comprehensive research agenda could be proposed to test different “arms” of the model. • Many values of further developing the model (parent selection of care factor in virtually every descriptive study of child care and early education that we do and complicates our understanding of findings). Evaluation of Child Care Subsidy Strategies: Illinois

18. Evaluation of Child Care Subsidy Strategies: Illinois