Subsidizing the Childcare Economy

64 Pages Posted: 9 Mar 2022 Last revised: 7 Mar 2023

Date Written: February 1, 2022


This Article studies how government childcare subsidies redistribute resources and values among children, parents, providers, and their workers engaged in diverse forms of childcare. Formal centers provide developmentally beneficial care in a regulated setting but are detached from supporting the children’s families. Home-based care often occurs informally, exempt from or in violation of regulations, but its mode of low-cost, flexible-hour, in-community care supports low-income parents’ work and family life. Federal and state policies today are shifting to concentrating subsidies primarily on centers, enhancing regulation of subsidized providers, and incorporating quality measurements.

Analyzing the political economy process behind this formalization trend, this Article finds that an educational mode of childcare is taking over the field of childcare experts and advocates, marginalizing childcare’s other societal values, such as its support to low-income parents and minority communities. The Article also offers the first systematic account of the reform’s distributional consequences across the childcare economy. In exchange for more developmental benefits to children in subsidized centers, this reform risks deteriorating home-based care, making the subsidies less accessible to low-income families and escalating the pressure on low-income parents to trade off paid work and childcare. It concludes that the costs of this formalization trend for low-income families have been underestimated and urges policy responses that support select forms of informal care. This Article primarily focuses on the Child Care and Development Fund (CCDF), the major federal-state partnership program making quality childcare accessible to low-income families.

Keywords: childcare, subsidy, low-income families, welfare state, distributional analysis

Suggested Citation

Zhang, Yiran, Subsidizing the Childcare Economy (February 1, 2022). 34 Stanford Law & Policy Review, Forthcoming, Available at SSRN: or

Yiran Zhang (Contact Author)

Cornell ILR School ( email )

New York
United States

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