Employment and Program Factors Associated with Exiting the Child Care Subsidy Program

Purpose.  Child care subsidies provide an important work support for low-income families by increasing access to affordable child care. Prior research indicates that subsidy spells are often brief, however (Grobe, Weber, & Davis, 2008; Ha, 2009). Short spells on the program may compromise the dual goals of improving parental employment and children’s development. Yet few studies to date examine the factors that limit subsidy duration. The purpose of this study is to determine whether employment and program factors help explain subsidy exits among a sample of subsidy clients in Illinois and New York.  Drawing from extant research on the prevalence of unstable job characteristics (Kalleberg, 2009; Presser, 2003) and cumbersome subsidy program requirements (Adams, 2008), we hypothesize that employment and program factors interfere with subsidy continuity. In particular, we expect that clients who work nonstandard schedules, variable shifts/hours, and with limited schedule flexibility will be more likely to exit the program. We also expect that clients who report difficulties with the application process and who report problems with subsidy payments will be more likely to exit.

Methods. We use telephone survey data from the Child Care Research Partnership Study (CCRP). The random sample includes 612 subsidy clients from Illinois and New York who were new entrants to the program between March 2011 and February 2012 and who were interviewed approximately 18 months after program entry. The sample reflects the diversity of the subsidy program in terms of race/ethnicity, immigration status, education, and family structure. Measures of employment factors include: hours worked; non-standard work schedules; variability in shifts/hours; schedule input; and ability to take time off during the workday. Program factors include: difficulty finding a subsidized provider; difficulty with the application process; and an indicator for experiencing problems with subsidy payments. We employ multivariate logistic regression models to predict a subsidy exit from these employment and program factors, controlling for observation period length and family demographic factors that may also influence subsidy exits.

Results. Descriptive results show that 52 percent of respondents reported a subsidy exit during the observation period. As hypothesized, multivariate logistic regression results suggest that respondents who worked nonstandard schedules and who reported less schedule flexibility (input and time off) were more likely to report a subsidy exit.  Schedule variability did not predict an exit. As hypothesized, respondents who reported difficulty finding a subsidized provider, difficulty with the application process, and subsidy payment problems were more likely to report an exit. A series of sensitivity analyses, including fixing the observation period to the sample’s minimum number of months observed, are conducted to assess the robustness of the findings.

Implications. Findings suggest that unstable job characteristics and problems with accessing the program and subsidy payments create challenges for subsidy continuity. The authors will discuss the implications of these findings for current policy efforts to reduce administrative hassles, such as simplifying eligibility requirements and increasing eligibility periods to 12 months, as well as efforts to reform program requirements to better fit the job realities of low-income workers.