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Do Child Care Subsidies Increase Employment Among Low-Income Parents?

Author

Listed:
  • Elizabeth E. Davis

    (University of Minnesota)

  • Caroline Carlin

    (University of Minnesota)

  • Caroline Krafft

    (St. Catherine University)

  • Nicole D. Forry

    (Child Trends)

Abstract

State child care subsidy programs are intended to support the employment of low-income parents, particularly for families receiving or likely to receive Temporary Assistance for Needy Families. To study the impact of child care subsidies on employment, this study used detailed data from a survey of low-income parents in Minnesota, linked with administrative data on subsidy receipt, to estimate endogenous switching models of subsidy receipt and parent work status. Parental preferences about the child development-related characteristics of child care settings were the basis for an instrumental variable used to predict subsidy receipt. Receiving a subsidy significantly increased the probability of employment and especially of full-time employment. The findings suggest that expansion of the child care subsidy program could lead to increased employment among low-income parents with young children.

Suggested Citation

  • Elizabeth E. Davis & Caroline Carlin & Caroline Krafft & Nicole D. Forry, 2018. "Do Child Care Subsidies Increase Employment Among Low-Income Parents?," Journal of Family and Economic Issues, Springer, vol. 39(4), pages 662-682, December.
    • Handle: RePEc:kap:jfamec:v:39:y:2018:i:4:d:10.1007_s10834-018-9582-7
    DOI: 10.1007/s10834-018-9582-7
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    Cited by:

    1. Yoshie Sano & Sheila Mammen & Myah Houghten, 2021. "Well-Being and Stability among Low-income Families: A 10-Year Review of Research," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 107-117, July.
    2. Carlin, Caroline & Davis, Elizabeth E. & Krafft, Caroline & Tout, Kathryn, 2019. "Parental preferences and patterns of child care use among low-income families: A Bayesian analysis," Children and Youth Services Review, Elsevier, vol. 99(C), pages 172-185.
    3. Christoph Zangger & Janine Widmer & Sandra Gilgen, 2021. "Work, Childcare, or Both? Experimental Evidence on the Efficacy of Childcare Subsidies in Raising Parental Labor Supply," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 449-472, September.
    4. Owen N. Schochet & Anna D. Johnson, 2019. "The Impact of Child Care Subsidies on Mothers’ Education Outcomes," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 367-389, September.
    5. Moldow, Erika & Davis, Elizabeth E. & Carlson, Barbara Lepidus, 2020. "Challenges states face in meeting the federal benchmark of equal access to child care: Evidence from a Colorado market price survey," Children and Youth Services Review, Elsevier, vol. 108(C).
    6. Kim, Jaeseung & Henly, Julia R., 2021. "Dynamics of child care subsidy use and material hardship," Children and Youth Services Review, Elsevier, vol. 124(C).

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    More about this item

    Keywords

    Child care; Work support; Child care subsidies; Employment; Endogenous switching model; Instrumental variables;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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