Child Care for Low Income Families:
Directions for Research...

Chapter 4 -- The Policy Environment in Child Care

The Issue in Brief

The consequences of this current structure of federal support for child care for low-income families were topics of much discussion at the first two workshops on child care for low-income families (Phillips, 1995). In particular, participants at those workshops examined the consequences of funding scarcity and of the fragmentation that characterizes federal child care subsidies for low-income families in terms of families access to and affordability of child care and the quality and continuity of care. Among the questions examined were: (1) What trade-offs do state agencies face when deciding how to allocate funds across nonworking and working-poor families, and between helping families pay for care and improving the quality of care? (2) What is known about how families construct their child care arrangements as they move from one funding stream to another? (3) How might the current child care system at the state level be affected if the federal government consolidates the direct child care funding programs and assigns greater responsibility for allocating these funds to the states?

In the years ahead, states and localities will be faced with an array of new responsibilities that encompass the design of service delivery, benefit structures and eligibility criteria, finance reform, the amount of public monies that will be dedicated to children and families, the distribution of these resources across families with differing financial and human resources, and standards of accountability. Decisions concerning the structure and allocation of resources for child care will be a salient item on the agendas of state legislators, governors, and administrators of state and local service agencies.

Furthermore, the role of state governments as managers of scientific data on children and families is likely to grow. In order to address the domestic issues for which they are now increasingly responsible, the states will be required to increase their competence as managers of scientific information and to develop models of cooperation with other states, the federal government, and the research community.

Directions for Research

Allocation of Child Care Resources

Workshop participants agreed that the structure of public investments in child care is in extraordinary flux amid mounting pressure for consolidation, growing recognition of the adverse effects of fragmentation, and increasing devolution of power from the federal government to the states. They also noted that these factors pose critical challenges to the existing research agenda, making it more crucial than ever to understand the context within which policy choices are made.

Participants noted the importance of research that addresses how states structure their different child care subsidy programs, and what factors enter into these policy, funding, and allocation decisions, broadening both the subjects and the constituency for research to include state legislators and child care administrators. One participant cited the need for research to draw together the many elements of policy debates that touch on children but that are often addressed in isolation from one another. How, in other words, do decisions that affect child care but are debated in the larger context of education, welfare, and health care influence or fail to influence each other?

Additional research should be done, participants said, to determine what factors guide state choices in spending child care block grant funds (e.g., budgets, political priorities, conflicts between political parties, the relative strengths of lobbying groups, the history of child care funding in the state). Investigations could determine, for example, how state policy makers make trade-offs between serving welfare families and serving non-welfare families when both groups have low income, are working, and need child care assistance; between serving more families with smaller amounts of assistance or fewer families with more assistance; and between funding more child care subsidies to families and improvements in the quality of child care for low-income families.

The Effect of Policy Decisions on Child Care

Workshop participants also called for research that assesses how the broader policy context within which government child care funds are provided including considerations of welfare, Head Start, and tax benefits affects the child care market in low-income neighborhoods. Studies are needed that determine how the immediate policy context influences the options that are available to low-income families, including such factors as the availability and affordability of care. Among the features of care that warrant examination, they said, are the relative supply of regulated and nonregulated arrangements in low-income communities, the cost of care relative to reimbursement rates, and the proportion of care settings that accept subsidized children.

Research should also assess the effect of policy decisions on the quality and continuity of care, participants said, noting recent efforts to study the effects of regulatory changes as an example (e.g., the Florida Quality Improvement Study, which is addressed in more detail in Chapter 5 Howes et al., 1995). And it should address how child care providers respond to various policies and changes in those policies, including how they allocate resources within their programs across staff salaries, capital costs, scholarships, and supplies and materials, for example.

The effects of policy trade-offs on the constraints that currently affect families child care options are also important to document, participants noted. Researchers need to examine how parents obtain information about their eligibility for child care subsidies and why some eligible parents fail to take advantage of subsidies, they said. Other issues that were discussed as warranting research attention included changes in the distribution of subsidies across nonworking and equally low-income working families, changes in the proportion of family income spent on child care in different socioeconomic groups, and effects on the work effort and capacity to maintain employment of families with differing access to subsidized child care. As before, the participants highlighted the importance of examining the effects of child care policy relative to other influences on these families lives.

A final issue that surfaced in discussions of the policy environment of child care concerned the capacity of states and localities to learn from their experiences as they reexamine the allocation of child care resources. What tracking and monitoring systems exist at the state and local levels to provide information about the ramifications of their decisions? How might the research community contribute to the quality, cross-state consistency, and uses of information systems? What mechanisms exist for connecting administrative data of this nature to the broader research literature on child care? These questions are taken up in the next chapter.