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9 Findings and Next Steps T his report describes employment trends and trends in the care of children and adolescents in the United States, discusses implica- tions of these trends for child and adolescent development, and characterizes the availability of public supports for parents as they attempt to balance family and work. This final chapter presents the findings, con- clusions, and policy options that are warranted, in the committee's view, by these trends and research evidence. Our primary focus is the area of overlap among four spheres of interest (illustrated in Figure 1-1): the work patterns and experiences of working parents; (2) the developmental needs of children and ado- lescents; (3) the support available to families; and (4) the roles of parents and caregivers. Our foremost priority is to understand the implications of work on the well-being of children and adolescents in working families. We also reviewed information on the ways in which supports for fami- lies have been integrated into the employment policies of private-sector companies. The data that exist suggest that access to corporate policies and benefits is uneven, with lower-income workers less likely to be covered. However, overall, we found that the scientific data in this area are limited and do not provide a comprehensive understanding of who these policies affect and the extent to which they support the well-being of children in working families. Our findings and array of policy options are therefore focused on public policies. 260
FINDINGS AND NEXT STEPS 261 FINDINGS Employment Trends · More children have employed parents. Among the many transformations that have occurred in the American family over the past 30 years, few are as dramatic as the increased rates of paid employment and the changing patterns of work among mothers with children. From 1970 to 2000, overall maternal labor force participation rates of mothers rose from 38 to 68 percent (while employment of fathers remained high and stable); for mothers with the youngest children, birth to age 3, this rate rose from 24 to 57 percent. This trend has held for mothers in a wide variety of circumstances--first-time mothers and never-married mothers, for example--and for all groups, regardless of family income, education, race and ethnicity, or place of residence. The result of this labor force change is that a larger fraction of children live in families in which all available parents are in the labor force--either they live with a single parent who is employed or they live with two parents, both of whom work at least some hours for pay each week. These changes in maternal labor force participation are in part a result of the fact that programs that provide income support to low- income families with children have increasingly emphasized and required parental employment. This trend is particularly striking for low-income families with a single parent, in which 55.5 percent of low-income chil- dren resided in 2000. Aid to Families with Dependent Children (AFDC) was originally intended to provide cash assistance to low-income single mothers to allow them to remain at home and take care of their children. In 1997 AFDC was replaced with Temporary Assistance for Needy Fami- lies (TANF), a program that requires mothers to work or seek employ- ment or training or both as a condition for receiving cash assistance. Under AFDC, mothers with a child under the age of one were exempt from work requirements. Under TANF, states may impose work require- ments on mothers with newborns. In almost half of the states, the em- ployment/training requirement extends to mothers with children under 1 year of age, and in some states, mothers with children 3 months old or younger are required to work. · Access to parental leave is limited. Only 45 percent of parents working in the private sector have guaran- teed unpaid parental leave through the 1993 Family and Medical Leave Act (FMLA). According to data from recent employee benefit surveys, less than
262 WORKING FAMILIES AND GROWING KIDS 5 percent have access to paid parental leave. Many parents do not have the right to more than the 12 weeks of leave mandated by the FMLA. The United States currently has what is essentially a three-tier system of family leave. One group of employees works for firms that offer paid leave for family or medical reasons. Currently no national or state laws or policies require firms to offer paid family leave, although five states-- California, Hawaii, New Jersey, New York, and Rhode Island--have tem- porary disability insurance programs that typically cover six to eight weeks of paid leave for maternity disability for qualifying workers. California has recently extended its program to cover individuals who take time off work to care for a new child (or to care for a sick or injured family member). The second group of employees works for firms that offer 12 (or more) weeks of unpaid leave for family or medical reasons. Under the FMLA, firms that employ 50 or more workers must provide 12 weeks of unpaid job-protected leave for qualifying workers who need to take leave to care for a newborn or for other family or medical reasons specified in the law. Also, various state parental leave laws require certain firms to offer unpaid leave for new parents who meet qualifying conditions. And some firms not covered by the FMLA or comparable state laws voluntarily offer 12 (or more) weeks of unpaid leave. The third group of employees has access to less than 12 weeks of unpaid family or medical leave. Over half (55 percent) of all private- sector workers do not qualify for leave under the FMLA because they do not work for large enough firms or because they have not worked the requisite number of hours in the previous year. Some of them have access to some period of unpaid leave for family or medical reasons, while others have no leave rights at all and could be fired if they took time off for family or medical reasons. Child and Adolescent Care · Children and adolescents spend significant time in nonparental care. Children and adolescents are spending many hours in the care of some- one other than their parents. Among the 12.2 million children ages 5 and younger with employed mothers in 1999, 80 percent were in a child care arrangement with someone other than a parent. These 9.8 million children cared for by someone other than a parent spent an average of 40 hours per week in child care. The 22 million children ages 6 to 14 with an employed mother spent an average of 22 hours per week in the care of someone other than their parents before and after school.
FINDINGS AND NEXT STEPS 263 · Opportunities for care for adolescents are limited. Opportunities are limited for school-age children and adolescents, par- ticularly those from low-income families, to engage in meaningful and enriching activities during the nonschool hours. The existing range of after- school programs and activities does not serve many young persons. For example, it is estimated that as little as 20 percent of the potential demand for programs is met in urban areas. Since the workdays of most parents often do not fully coincide with the schooldays of older children and adolescents, many adolescents--as many as 40 percent of 14-year-olds--care for themselves without adult supervi- sion during nonschool hours. Furthermore, many after-school programs are not presently able to provide services during nonschool days (i.e., week- ends, holidays, summertime) or for parents working nonstandard hours (e.g., in the early morning hours and evenings). · Quality of care matters for children and adolescents. Children The quality of child care has implications for children's development, but the relation between participation in child care and children's develop- ment depends on such variables as the activities they experience in care, the quality of their interactions with their caregivers, the type of setting (i.e., day care center, family day care home, relative care), and the amount of time in care. Some evidence also suggests bigger effects of high-quality child care for the most disadvantaged children. The best evidence of these effects comes from a set of studies in which samples of low-income children were randomly assigned either to a treat- ment group receiving high-quality child care and other social services or to a control group that did not receive any special services. Long-term follow- ups of the children revealed statistically significant and large effects of the treatment in reducing crime, welfare, teen childbearing, education, employ- ment, and earnings. In nonexperimental studies that follow children over time, high-quality child care is associated with better developmental out- comes. Some evidence also suggests bigger effects of high-quality child care for the most disadvantaged children. It remains uncertain to what extent these are causal impacts; however, child care quality appears to remain a significant determinant of children's development. Adolescents The quality of care does not matter only in early childhood. The
264 WORKING FAMILIES AND GROWING KIDS characteristics of care and activities for school age children and adolescents are also linked with developmental outcomes. For example, structured, supervised, and skill-focused activities for adolescents tend to show favor- able outcomes, while unstructured programs may not only fail to offer benefits, they may also amplify existing problems or encourage the develop- ment of new problems. Rigorous evaluations of programs serving adoles- cents are quite limited; however, results from a few well-designed evalua- tions indicate that engagement in structured, adult-supervised after-school programs that focus on prevention of problem behaviors and enhancement of psychosocial competence may prevent onset of a variety of problems during adolescence and promote engagement in school and community and aspirations for the future. · Much child care is not of high quality or developmentally beneficial. There is a wide range in the quality of care that is available for young children in the United States, but the evidence indicates that much of the care in the United States is mediocre or worse, and children in lower- income families often receive lower quality care than children in higher income families. The best available data (from the National Institute of Child Health and Human Development's Study of Early Child Care) on a diverse sample of children of varying ages in different types of arrange- ments (centers, child care homes, in-home nannies, grandparents) observed that very poor quality and very high quality are relatively uncommon, with the mode being care that was categorized as "fair" and in which positive caregiving was "somewhat uncharacteristic." Despite the growth in public supports, many publicly funded early care and education programs which are intended to provide developmentally beneficial nonparental care for young children, such as Head Start and Early Head Start, also do not reach all eligible children. Funding for the major existing child care programs is insufficient to allow services to be provided for all eligible children. For example, Head Start serves about 40 percent of eligible children ages 3 to 4 years, and the Child Care and Development Fund (CCDF) and TANF programs together serve about 15 percent of eligible children. Furthermore, Head Start eligibility rules re- quire that 90 percent of children enrolled are from families with income below the poverty line, thereby excluding additional children in families with income above the poverty line who could benefit from Head Start. Several public programs do provide significant funding for child care services for low-income families in the United States (i.e., CCDF, TANF, the Child Care and Adult Food Program, Head Start, Title I, and state prekindergarten programs); however, these programs do not ensure care that is both of high quality and meets the needs of working families.
FINDINGS AND NEXT STEPS 265 The CCDF and TANF provide funding primarily in the form of subsi- dies distributed through vouchers that can be used to purchase child care services from any provider that meets state regulatory standards or is le- gally exempt from the standards. Regulatory standards are often not set to ensure that child care is of high developmental quality, and many caregivers are exempt from regulations. Thus, subsidies from these two programs can be used to purchase child care services of low or mediocre quality. In contrast, Head Start, Title I, and state prekindergarten programs must meet standards intended to ensure that the services provided are of high developmental quality. These programs provide child care services as a byproduct of their main function, which is to enhance the development of children who are at risk of developmental delay as a result of low income. The parents of children enrolled in these programs are not required to work, and the services are often provided for only part of the day or part of the year. Hence, these programs are likely to provide services to children of high developmental quality, but they may not be compatible with full-time employment of their parents, unless additional child care services are avail- able from other sources. Implications of Work and Care Trends In some circumstances, employment of both parents in a two-parent family or employment of the only resident parent in a single-parent family can be beneficial for children. Work can result in additional income, pro- vide a positive role model for children, and expose children to stimulating and supportive care environments--if the child is being cared for in a quality setting--and, for adolescents, result in increased autonomy and responsibility. If a consequence of employment is the use of poor-quality child care, lack of supervision of children and adolescents before and after school, or in- creased parental stress because of time demands or a stressful or low-paying job, then the implications for children and adolescents can be negative. Some young children are particularly affected by maternal employ- ment. For newborns, outcomes for mothers and children are better when mothers are able to take longer periods of leave. Outcomes for children may be better when mothers are able to return to work part time or to delay returning to work full time until after the first year. Workers who do not have any family or medical leave rights may be forced to choose between putting their job at risk by taking care of their children or putting their children at risk by staying on the job. Furthermore, some workers eligible only for unpaid leave either do not take as much time as they need or face financial hardship to do so. As a result, some employees who need leave for family reasons do not take leave or cut their leave short. Others take leave
266 WORKING FAMILIES AND GROWING KIDS but then turn to public assistance, draw down their savings, or go into debt to make ends meet while they are on leave. Adolescents whose parents work and who do not have an adult-super- vised arrangement after school may experience social and academic prob- lems as a result of time spent in self-care. Adolescents who spend large amounts of time in out-of-home self-care that features frequent and un- structured socialization with peers have the potential to develop antisocial behaviors and related adjustment problems. The quality of available after- school programs is also highly variable, and there is evidence that program quality is related to child academic performance and emotional well-being. The content of many after-school programs is limited, and many programs focus on providing a safe environment or providing academic assistance (homework time, tutoring, and preparation for mandated standardized tests) at the expense of promoting other aspects of the developing child, such as physical health and fitness, interpersonal competence, creativity, and motivation. In summary, while data are not available to establish that the average well-being of children has declined, the situation of some children and adolescents is clearly not good. Many children are spending many hours in nonparental care, and much of it is of mediocre quality or worse. Evidence shows that high-quality out-of-home care has the potential to improve the social and cognitive skills of children and adolescents, but this quality of care is not available to all children and adolescents in working families. Current Public Policy Response The public sector has responded to the challenges facing working fami- lies in caring for their children by providing them with greater resources. Many important new public programs for children and adolescents have developed in the past 25 to 30 years, and social welfare programs to cover such services as early childhood education and medical care for low-income children have been expanded. However, many of these programs are still not specifically designed to enhance the cognitive, social, and behavioral development of children. Those that do are not available to all children and adolescents. Fundamentally, policies and programs for working families and their children often focus on only half of the equation--either the employment of the parent or the well-being of the child--without taking into consideration the simultaneous and interactive needs of both. POLICY OPTIONS A primary goal for public policy should be to improve the quality of care for children and adolescents in working families.
FINDINGS AND NEXT STEPS 267 The committee identified policy options in the areas of child and ado- lescent care and family leave that could assist in meeting the goal of improv- ing the care of children and adolescents. The committee also suggests further consideration of new research primarily intended to strengthen the empirical base on which future policies can rest. The committee is sensitive to the reality that additional funds will be required to improve care for children and that budgets are constrained and therefore, whenever possible, the committee developed rough cost estimates of these policy options, as well as some of the likely benefits. The information needed for a complete cost-benefit analysis of all of the policies discussed here is not available. The policy options presented have implications for state and federal deci- sion making. The recent devolution of much public responsibility for child and family well-being from the federal government to the states presents opportunities to develop innovative strategies that respond to local employ- ment and demographic conditions. Child and Adolescent Care In the committee's view, the key problem of working families with children and adolescents is a lack of care that both supports child and adolescent development and meets the needs of working parents. The most plausible explanation for the low quality of care in the United States is lack of demand for better care due to its high cost and lack of awareness by parents of how to assess child care quality. One justification for public support of high-quality child care is its benefits to society beyond the benefits that accrue directly to children and their parents. A second justification is its potential to enhance equality of opportunity. Public support for high-quality care for poor children may be justified on the grounds that, even if benefits accrue only to the poor children who receive the better care, this society believes that these children should have oppor- tunities enjoyed by others that would otherwise not be available to them. The evidence on the external benefits of high-quality child care is limited, but the evidence available (from evaluations of programs such as the Perry Preschool Project, Abecedarian, Early Head Start National Evaluation) in- dicates that substantial external benefits are achievable. Increased funding for subsidies for low-income families is critical to sustain the employment and income gains made by low-income families in the 1990s. However, funding increases alone do nothing to address the problem of low-quality care. Increased subsidies not tied to the use of high- quality care will not result in a significant improvement in the quality of child care available. Cost information for the child care policy options is summarized in Box 9-1 and discussed in more detail below. Fully implemented, these policy
268 WORKING FAMILIES AND GROWING KIDS options could cost as much as an extra $25.2 billion for Head Start and Early Head Start, as much as $35 billion for prekindergarten and early education, or as much as $54 billion for quality vouchers. Costs could be reduced through partial implementation of these options. The implementa- tion of one or more options could also make the expansion of the other options unnecessary, given the overlap in the populations they serve. Policy Option: Expand and increase access to Head Start and Early Head Start. Expand the hours of Head Start, increase access to serve more children who are currently not eligible, including children under age 3, or provide full-day year-round care in order to help address the problem of insufficient availability of high-quality child care for young children. Head Start and Early Head Start are currently limited to children whose families have incomes below the poverty line (or whose child has a disability). Head Start targets children ages 3 and 4; Early Head Start targets children under age 3. The results of the Early Head Start Evaluation, as well as the National Head Start Impact Study currently under way, will provide guidance for program improvement, as the program expands to serve more children from birth to age 5 for more hours and ensures that the program meets the full-day, year-round needs of working families. Cost estimate: The costs in addition to the current budget of $6.67 billion (appropriation for FY 2003) to expand or enhance services would vary. To illustrate the cost of these options, we estimate that extending part-day, part-year Head Start services to all eligible children ages 3 to 4 years not currently served would cost $2.9 billion (2001 dollars); extending full-day, full-year services to all children ages 3 to 4 years currently served only part-day, part-year would cost $2.5 billion; extending full-day, full- year services to all eligible children ages 3 to 4 years who currently are not served at all or are served only part-day, part-year would cost an additional $7.8 billion; and serving all eligible children ages birth to age 5 not cur- rently served would cost an additional $14.0 billion for part-day, part-year services and an additional $25.2 billion for full-day, full-year services.1 It 1 Currie (2001: 221) reports that in 1998 the cost of part-day Head Start services for 34 weeks per year was $5,021 per child, and the cost of full-day, year-round service was $9,030. Adjusted to 2001 dollars, these figures become $5,455 and $9,811, respectively. In FY 2002, the Head Start Bureau estimates that 24.6 percent of children served were in full-day, year- round programs. There were 3.93 million children in poverty in calendar year 2000, and we assume one-third (1.31 million) were age 3 to 4. Of these 1.31 million poor 3- to 4-year-old children, 0.536 million were not served by Head Start, and 0.774 million were served by Head Start, 0.584 million part-day, part-year, and 0.190 million full-day, year-round. We
FINDINGS AND NEXT STEPS 269 should be noted that some of the eligible children not currently served by Head Start might be enrolled in similar programs funded by Title I-A or by state prekindergarten initiatives. Thus, these figures may overestimate the cost of expanding Head Start, but insufficient information is available to estimate by how much. Policy Option: Expand prekindergarten and other early education pro- grams delivered in community-based child care programs. Over the past decade, there has been an increased interest in providing prekindergarten programs to children under age 5. In the past, such pro- grams were often funded for a half-day and delivered primarily in public schools. However, in more recent years, several states, including Georgia, New Jersey, New York, and others, are providing state prekindergarten dollars directly in full-day (full school-day) community-based child care programs. And in other states, such as North Carolina (i.e. the Smart Start Program), early education funding is being made available for children from birth to 5. Providing state prekindergarten funding directly to full-day commu- nity-based child care programs and tying prekindergarten funding to higher standards, teacher qualifications, and curriculum requirements has the potential to improve the overall quality of community-based child care. These approaches would allow parents to choose providers that meet their full-day needs, but also allow programs to improve quality. Cost estimate: States are currently spending a little over $2 billion on prekindergarten initiatives for children at risk of school failure (Blank and Mitchell, 2001); at the federal level, $500 million is spent on prekinder- garten through Title I (the education program for disadvantaged students); $6.67 billion is spent on the federal Head Start program (appropriation for FY 2003). These expenditures do not take into account the amount spent on child care and prekindergarten by private paying parents with children ages 3 and 4. The Committee for Economic Development (2002) considered the likely costs of universal prekindergarten. The estimated costs for a part-day, part-year program are $4,000 to $5,000 per child. There are approxi- mately 8.3 million children ages 3 to 5 not yet enrolled in prekindergarten. If all these children were enrolled in publicly funded prekindergarten, the assume that three-quarters of 5-year-old children are in kindergarten and therefore not eli- gible for Head Start. Finally, we estimate that 0.870 million children in total were served by Head Start in calendar year 2000.
270 WORKING FAMILIES AND GROWING KIDS BOX 9-1 Cost Estimates for Child Care Policy Options Policy Option: Expand and increase access to Head Start and Early Head Start. Per child cost estimate (in 2001) Part-day, part-year Head Start: approximately $5,021 per child. Full-day, full-year Head Start: approximately $9,811 per child. Current spending $6.67 billion Cost estimate for this policy option The costs in addition to the current budget to expand or enhance services would vary depending upon who is served and by what level of services: · Full-day, full-year services provided to all eligible children ages birth to age 5 not currently served: $25.2 billion. · Part-day, part-year services provided to all eligible children ages birth to age 5 not currently served: $14.0 billion. · Year-round, full-day services extended to all children ages 3 to 4 years current- ly served only part-day, part-year: $2.5 billion. · Year-round, full-day services extended to all eligible children ages 3 to 4 years who currently are not served at all or are served only part-day, part-year: $7.8 billion. It should be noted that some of the eligible children not currently served by Head Start might be enrolled in similar programs funded by Title I-A or by state prekin- dergarten initiatives. Thus, these figures may overestimate the cost of expanding Head Start, but insufficient information is available to estimate by how much. Policy Option: Expand prekindergarten and other early education programs delivered in community-based child care programs. Per child cost estimate Part-day, part-year prekindergarten program: $4,000 to $5,000 per child. Current spending States are currently spending a little over $2 billion on prekindergarten initiatives for children at risk of school failure; at the federal level, $500 million is spent on prekindergarten through Title I (the education program for disadvantaged stu- dents); $6.67 billion is spent on the federal Head Start program. These expendi- tures do not take into account the amount spent on child care and prekindergarten by private paying parents with children ages 3 and 4. (continued)
FINDINGS AND NEXT STEPS 271 BOX 9-1 Continued Cost estimate for this policy option It is estimated that publicly funded prekindergarten for all would cost an additional $25 to $35 billion annually. Policy Option: Expand child care subsidies through quality-related vouchers. Per child cost estimate The estimated cost of a voucher for full-day year round high-quality child care for a child aged 0-5 in a family with income below the poverty line is $6,000, with lower estimates for older children, lower-quality care, and children in higher-income fam- ilies. Current spending Approximately $21 billion Cost estimate for this policy option It is estimated that the program would cost an additional $54 billion. cost would be $33.2 to $41.5 billion annually. Head Start and state-funded prekindergarten programs already meet some of these costs, and therefore it is estimated that publicly funded prekindergarten for all would cost an additional $25 to $35 billion annually. Policy Option: Expand child care subsidies through quality-related vouchers. A relatively new concept in child care policy would provide vouchers with a reimbursement rate that increases with the developmental quality of child care purchased from accredited child care centers or family day care homes for children from birth to 12. Quality would be defined by process measures, such as the Early Childhood Environmental Rating Scale (ECERS) rather than (or in addition to) structural features and would be certified by an independent accreditation organization, such as the National Associa- tion for the Education of Young Children (NAEYC). Quality-related vouch- ers would give parents an incentive to seek child care of high quality and the purchasing power to afford it. This in turn would give providers an incen- tive to improve quality in order to attract consumers with the greater purchasing power. The value of the voucher would have to be high enough to cover the cost of high-quality care and relatively low (perhaps zero) if
272 WORKING FAMILIES AND GROWING KIDS used for low-quality care. This approach would give parents an incentive to be employed and to seek high-quality child care, unlike existing pro- grams, which encourage one or the other but not both. This approach could be implemented with a new program, or through transformation of existing programs, such as CCDF and TANF. Cost estimate: Blau (2001) estimated the cost of a quality-related voucher. His proposal would reimburse families in poverty for up to $6,000 per year for high-quality child care for preschool age children, $4,000 for mediocre to good-quality care, and $2,000 for lower quality care. The value of the voucher would be reduced by one-sixth for families with income between one and two times the poverty line, reduced by half for families with income between two and four times the poverty line, and would not provide any reimbursement for families with income over four times the poverty line. High-quality care defined as care with an ECERS score of 5.5 or greater would cost roughly $6,000. Mediocre to good- quality care (ECERS score of 3.50 to 5.49) would cost roughly $5,000, of which 80 percent is the subsidy value of $4,000, while $2,000 is about half the cost of low-quality care (ECERS less than 3.5). These differential reimbursement rates by quality provide an incentive for consumers to pur- chase high-quality care. Approximately $21 billion is currently spent on child care and early education subsidies (Blau, 2001). Using estimates of the number of chil- dren in the relevant age ranges and assuming take-up rates of 65 percent for high-quality care, 15 percent for good-quality care, 10 percent for low- quality care, and with 10 percent of families assumed not to take up the voucher at all, the estimated annual cost is $75 billion (in 1999 dollars). After accounting for savings from eliminating other child care subsidy pro- grams, the net cost is $54 billion. The cost could be reduced by making the vouchers less generous, thereby reducing take-up rates, and by restricting eligibility. Policy Option: Increase the availability, hours, and quality of after-school programs. After-school programs and activities are a critical source of child care and offer opportunities for preventing problems and promoting competen- cies during childhood and adolescence. The benefits are most apparent for young persons residing in high-risk and disadvantaged areas. These pro- grams have rapidly expanded during the past decade. However, opportuni- ties for participation in after-school programs and activities are still both costly, and for many, inaccessible, particularly for children and adolescents from families with low incomes. Expanding opportunities for participation in quality after-school programs and activities could be supported through
FINDINGS AND NEXT STEPS 273 expanding opportunities for participation in quality after-school programs and activities in multiple settings, such as schools, faith-based organiza- tions, and community centers. One possibility would be to increase funding for the 21st Century Community Learning Centers Programs (CCLC). Increased funding for CCLCs would (1) increase the number of available after-school programs, particularly for children and adolescents in economically disadvantaged areas; (2) offer stable support to established programs that demonstrate quality programming and benefits to participants; and (3) increase the quality of existing and developing programs, including a greater emphasis on enrichment activities other than academic remediation. In the 2000 competition for CCLC funding, 2,252 communities sought funds to establish or expand after-school programs. Funds were available to support only 310 grantees (13.7 percent of the total applicants), even though over 1,000 of the applicants who did not receive funds were re- garded as high-quality applicants. Accordingly, the disparity of available funding to grantee applications is substantial. In addition, the stability of funding from CCLC is also a consideration. CCLC grants typically provide funding for three years, with an option to extend the use of funds (but not the amount of funding) to five years. Because after-school pro- grams rely heavily on cash grants for development and maintenance, and because developing high-quality programs requires a substantial time com- mitment and program continuity, the funding support from CCLC should allow for the possibility for previous grantees to apply for continuation of funds. Cost estimate: To fund all grantees in 2000 that submitted high-quality applications (at the amount of funds requested), the CCLC budget would need to expand to approximately $600 million. To fund all grantees re- gardless of the application quality (at the amount of funding requested), an expanded budget of approximately $900 million would be required. Family Leave · Policy Option: Improve parents' ability to take leave after the birth of a child, especially among low-income parents. There is evidence that taking family leave benefits parents and children, and that the right to do so is available to some but not others. Unless there is some provision for earnings replacement while on leave, many low- income workers will likely forgo the opportunity to take unpaid leave. Options for public financing of income replacement include: (1) allow- ing the use of unemployment insurance (UI) funds to provide pay to work- ers at home caring for a newborn, (2) extending the temporary disability
274 WORKING FAMILIES AND GROWING KIDS insurance (TDI) programs currently in place in five states to cover family or medical leave, (3) developing a new social insurance program to cover the costs of replacing at least a portion of parents' incomes while they are out on family or medical leave, or (4) developing a new cash benefit program to offset the costs associated with caring for a young child. Proposals to allow the use of UI funds to provide pay for parental leave are under consideration in many states. In 2000, the U.S. Department of Labor issued new regulations, the Birth and Adoption Unemployment Com- pensation regulations, which would allow states to use unemployment ben- efits to pay for a period of parental leave. This "Baby UI" option has been considered by about half the states but has not been enacted by any to date, and in December 2002 the Labor Department proposed rescinding the regulations that would allow this option. Estimates of the costs of such a program vary. Currently, the UI program pays out about $20 billion a year nationwide. The Labor Depart- ment, in issuing the regulations, estimated that the new program might increase these overall UI costs by roughly $1.2 to $1.8 billion--an increase of 6 to 9 percent. However, the Employment Policy Foundation (2000) estimated that UI costs would increase by $14.4 billion--an increase of 70 percent. The discrepancy between these estimates reflects different views of how many new parents would take up the benefit and how long they would stay out on leave. A subsequent analysis conducted at the Urban Institute (Vroman, 2001) considers both these issues and projects that expansion of the UI program to cover births or adoptions or both would raise costs by 6 to 7 percent relative to the overall cost of the program. There would also be some cost savings, due to reductions in the numbers of new parents receiv- ing payments through TDI or public assistance programs and in the num- bers receiving child care subsidies. Another way to provide paid leave is via extensions of existing TDI programs. As discussed earlier, five states currently have TDI programs that provide paid leave for maternity disability, along with other types of leave for disability. Because these are large states, together these programs cover over 20 percent of all American workers. One of the five TDI states, California, recently enacted legislation to extend its program to provide paid leave for up to six weeks for parents with a newborn or for employees with an ill family member. Funding for leave provided under the new law will come from an increase in the payroll tax rate on employees of 0.08 percent per year in 2004 and 2005 to cover the initial costs of the program; this amounts to about $22 per year in additional payroll taxes per employee in the state. The law requires employees to use up to two weeks of accrued vacation time before claiming pay from TDI. TDI programs pay benefits as a percentage of usual weekly earnings and tend to be more generous than
FINDINGS AND NEXT STEPS 275 UI programs. Employees on TDI leave in California will be paid about 55 percent of their salary, with a maximum benefit of $728 per week.2 A third type of proposal is to establish a new social insurance program. An example of this approach is a proposal by Walker (1996) for a parental leave account (PLA), which he envisions as a savings account combined with a line of credit from the federal government, which parents could use to cover the costs associated with a leave of up to one year following the birth or adoption of a child. The PLA would be financed by an additional payroll tax of 3.5 percent, deducted from an individual's paycheck and credited to his or her PLA. Families could draw on their accounts to finance one parent to stay at home with a new child for up to one year. If a family did not have enough funds in its PLA, the federal government would extend a loan, which would be repaid from subsequent payroll taxes over the remaining working lifetime of the parents. Upon retirement, posi- tive balances in a PLA would be transferred to the social security system and would lead to an increased retirement benefit, while negative balances would lead to lower benefits. Thus, a family that did not take advantage of the PLA would receive a "return" on their extra payroll tax payments upon retirement. A fourth option that has been proposed is the development of a cash benefit to offset the costs to parents of caring for a young child, in particu- lar in the first year of life. Such a benefit could be instituted on a means- tested or universal basis. With regard to means-tested benefits, two states-- Minnesota and Montana--currently have at-home infant child care programs, which provide cash benefits to low-income parents with a child under the age of 1. These programs differ from welfare in that, while means-tested, they are limited to families with a child under the age of 1 (and they do not involve work or other activity requirements). They differ from child care in that the funds are used to support the parents in caring for the child themselves, rather than purchasing nonparental child care. In Minnesota, the first state to enact such a program, payment comes from the state's child care funds and is limited to 90 percent of what would have been paid for care for that child. Thus, the program results in cost savings for each family that result from the shift from using paid child care to using parental care. With regard to universal programs, Waldfogel (2001c) has proposed an early childhood benefit system, which, modeled on programs in Finland and Norway, would provide cash benefits to parents with chil- 2For more information on California's new program, see Broder (2002). See also Vroman (2001) for a discussion of the California and other TDI programs. For cost-benefit analyses of paid family leave in California, see Dube and Kaplan (2002) and the Employment Develop- ment Department (2000).
276 WORKING FAMILIES AND GROWING KIDS dren under age 3. Parents could choose to use the benefit to cover the costs of a leave from work, the costs of child care, or a combination of the two. Another European example comes from the United Kingdom's baby tax credit, which doubles the value of the child tax credit for families with infants. Policy Option: Discourage the practice of requiring mothers on welfare to return to work at 12 weeks following a birth. There is some evidence of a negative effect of early and extensive mater- nal employment on children's outcomes in some groups of families. TANF rules currently allow states to require mothers to return to work as soon as their child is born; this would not change under pending reauthorization proposals. Under current rules, single-parent families with children under age 6 are able to meet federal participation requirements by engaging in 20 hours a week of work-related activity. The reauthorization proposal cur- rently being considered seeks to modify this provision so that such families would need to engage in 40 hours a week of work-related activity in order to fully count toward participation requirements. Policies that would allow new mothers to delay returning to full-time employment until after the first three months of a child's life, and possibly until after the first birthday, deserve attention. Cost estimate: There is little evidence available on the potential costs or benefits of such policies. Two states that have experimented with such policies--Minnesota and Montana--are using child care funds (in place of TANF funds) to cover cash grants to mothers in this situation. If all the families supported through these programs received child care funding, the cost of these programs is essentially zero, since they use funds that would have been spent on child care. However, to the extent that take-up of the cash grant is higher than the take-up of child care would have been, the cost of providing the cash benefits would be higher. Policy Option: Expand coverage of the Family and Medical Leave Act. The Family and Medical Leave Act could be expanded to cover activi- ties and individuals not currently eligible (for example, attending meetings at children's schools, taking children to routine medical or dental visits), to provide options for working part time or with flexible hours, and to cover other family members (such as grandparents). The committee did not explore the details of specific policies in this area but did hear evidence that the lack of such policies is a growing concern to working families. We therefore have not identified options for specific polices to be pursued; rather, we flag these issues as an area of
FINDINGS AND NEXT STEPS 277 concern and suggest them as the topic of further research and analysis. Such analysis should make use of survey and other data to identify the numbers of families who might benefit from particular policy expansions and the likely costs of such policies. Further research should also examine the relative advantages and disadvantages of policies that require employers to provide such benefits compared with policies that provide such benefits through social insurance mechanisms. RESEARCH The committee notes throughout the report areas in need of further research. Here we highlight priorities. Child and Adolescent Care The most recent nationally representative data on the structural mea- sures (group sizes, caregiver-to-child ratios, provider education and train- ing, provider turnover rates) are from 1990, and no nationally representa- tive data are available on the process measures (the experiences that children have with their caregivers, with other children, and with age-appropriate activities and materials). In the committee's view, the highest priority should therefore be the collection of national data on process quality through the institution of a new nationally representative survey of child care arrangements with a focus on the quality of care. The survey should include all types of child care arrangements used by children of preschool, primary, and secondary school age. The survey should include a household module or be linked to a major household survey so that detailed informa- tion on family socioeconomic characteristics and child care quality can be linked. Ideally, such data would be longitudinal and would include assess- ments of child health and development, in order to develop a better under- standing of the effects of child care quality on children's development, school progress, and health. One model would be a telephone survey like the 1990 Profile of Child Care Settings to collect data on structural quality from a large representative sample of centers and family day care homes, supplemented by in-person interviews and observation of a subsample of the survey to measure process quality. The survey should also collect data on cost and fees. Another high priority is a random-assignment child care experiment: the care provided must be above basic quality standards and include chil- dren in circumstances in which no subsidized care would be otherwise available, such as areas in which there are long waiting lists. The experi- ment should assign children to facilities of varying quality, give families subsidies that come with varying incentives or requirements regarding qual-
278 WORKING FAMILIES AND GROWING KIDS ity, and monitor their developmental progress. This should be done for children of both preschool and school age. Research is needed on how young people spend their time during the summer months. Most of the available research on children and adoles- cents is collected during the school year, in part because of the convenience of the school setting for recruiting samples and collecting data. However, because school provides the dominant form of child care for most young people during the morning and early afternoon during weekdays, alterna- tive arrangements and patterns of time use must occur during the summer. A report on child care for school-age children (ages 6 to 12) during the summer months using data from the 1999 National Survey of Families highlights marked differences in the use of structured enrichment activities and programs, hours spent in supervised care by relatives, and hours spent in self-care, as well as the use and cost of paid child care during the summer compared with the school year. The extent to which child care arrange- ments during the summer impact child adjustment, however, is not eluci- dated. More generally, how adolescents spend their time during the sum- mer and how this use of time impacts adjustment represents a gap in the knowledge base. The impact of sibling care--both for older siblings who provide care and for younger siblings who receive such care--is not well understood. Many families rely on older siblings to provide care and supervision for younger siblings while parents are working. Qualitative evidence makes clear the utility and necessity of such arrangements for working families. Theoretical perspectives on this issue are conflicting, and quantitative em- pirical evidence is limited and mixed. Whether care from older siblings is beneficial or detrimental to the recipient(s) depends on the individuals and family considered. Research on the possible effects of sibling care for the adolescents who provide the caregiving is nearly absent. Considerably more attention to this form of child care is needed. The processes by which adolescent involvement in structured after- school endeavors (enrichment activities and employment) affect adjustment need to be clarified. The empirical knowledge base on how structured after-school endeavors relate to short- and long-term adjustment has ex- panded greatly in recent decades. Enrichment activities and paid employ- ment are both normative for adolescents and represent a form of supervi- sion while parents are working. However, research on why and how engagement in these structured activities affects adolescent functioning is only beginning to emerge. Longitudinal investigations of structured activi- ties that are theory-driven, account for possible selection biases, assess putative mediators, and consider individual differences and activity experi- ences are particularly scarce.
FINDINGS AND NEXT STEPS 279 Family Leave A systematic effort to evaluate the impact of access to leave on child and family outcomes should be undertaken. One option is to treat the recent passage of a paid leave law in California as a natural experiment, in which before-after differences in outcomes are compared with those in other states in which the policy did not change. Another more costly, but probably more informative, approach would be a random assignment ex- periment in which families are assigned to different leave policies beyond those that would otherwise have been available. Income Support Although many studies have examined the role of income on child cognitive and socioemotional development, a variety of questions remain. First, the causal role of income on child development and the size of income effects continue to be debated. We now have data from several experiments that manipulated income for low-income families inside and outside the welfare system in the 1990s. However, these experiments were limited to a few areas of the country and were conducted during an economic boom. A new generation of experiments should be conducted, both inside and outside welfare systems, to examine how experimentally manipulated income influences child and youth development. These should be conducted in a variety of state and local settings and should include sufficient numbers of populations that have been underrepresented in studies to date (e.g., very young children, families with children with disabilities, immigrants). Second, the question of threshold effects of income has not been suffi- ciently explored. How much income change is required to produce not just statistically but developmentally and societally important effects? How might such income thresholds differ, depending on previous education, income, employment, and child characteristics? Such questions can be addressed through large-scale nonexperimental research or through care- fully designed experimental studies. Answers would be critical in helping to inform future changes in income support policies. Finally, data on the effects of particular income support policy ap- proaches on children and youth are needed. For example, there has been no research documenting the effects on children of variation in earned income credit policies (at the state level, for example, where there is some varia- tion). There have been no experiments testing particular policy options, such as making the dependent care tax credit refundable. Experiments that altered levels of income support within the welfare system, through earn- ings disregards, have been conducted, but only in a few localities. These
280 WORKING FAMILIES AND GROWING KIDS and other efforts to examine the impacts of income support policies should be encouraged through federal and state evaluation initiatives. Work Benefits and Policies New research and collection of data on private sector policies and benefits for employees with children would further enhance our under- standing of the current patterns of support for working families. This research could build on existing surveys being conducted by government agencies and private organizations with the aim of providing more detail about who is covered and how well the policies support the well-being of the children and adolescents in these families. CLOSING THOUGHTS This report has identified some important opportunities that have the potential to improve the quality of child and adolescent development in this country through new or expanded public policies. Children are spending vast numbers of hours in child care that fails to add as much to their social and cognitive skills as we know can be provided. Recent research has convinced the committee that the nation is not doing nearly enough to help families, particularly low-income families, with the difficult task of provid- ing for the material and developmental needs of their children. The com- mittee has identified some promising policy options for action by policy makers. These policies should receive serious consideration.