Impacts of Eligibility Expansions and Provider Reimbursement Rate Increases on Child Care Subsidy Take-Up Rates, Welfare Use and Work

51 Pages Posted: 16 May 2003 Last revised: 1 Nov 2010

See all articles by Ann Dryden Witte

Ann Dryden Witte

Wellesley College - Department of Economics; National Bureau of Economic Research (NBER)

Magaly Queralt

Wellesley Child Care Research Partnership

Date Written: May 2003

Abstract

We find that reforms in the Rhode Island subsidized child care program, including income and age eligibility expansions and increases in the reimbursement rates paid to formal providers, significantly increased the likelihood that current and former welfare families: a) would use child care subsidies and b) would work 20 or more hours per week. In addition, these policy changes significantly increased the probability that family heads of household would leave welfare for work. The most powerful impact of the Rhode Island changes in child care policies was on families that had left welfare (i.e., former cash recipients) and that worked at least 20 hours per week. These policy changes had less effect on families receiving cash assistance and enrolled in some approved activity (e.g., education or training) other than work. We were not able to assess the impact of the Rhode Island policy changes on families who were never on cash assistance. However, the large increase in the number of such families receiving child care subsidies after the reforms were instituted suggests that the impact may have been substantial. We also estimate that Rhode Island's reform of its cash assistance program and of its child care subsidy program, in combination, almost tripled the probability that a typical head of household currently or formerly receiving welfare would work 20 or more hours per week (i.e., the probability increased from 7% in the second quarter of 1996 to 22% in the second quarter of 2000) and almost halved the probability that a single mother in the sample would be on cash assistance and neither working nor in some other approved activity (i.e., such probability decreased from 47% in the second quarter of 1996 to 25% in the second quarter of 2000).

Suggested Citation

Dryden Witte, Ann and Queralt, Magaly, Impacts of Eligibility Expansions and Provider Reimbursement Rate Increases on Child Care Subsidy Take-Up Rates, Welfare Use and Work (May 2003). NBER Working Paper No. w9693, Available at SSRN: https://ssrn.com/abstract=406065

Ann Dryden Witte (Contact Author)

Wellesley College - Department of Economics ( email )

106 Central Street
Wellesley, MA 02181
United States
781-283-2163 (Phone)
781-283-2177 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Magaly Queralt

Wellesley Child Care Research Partnership ( email )

Wellesley College
Wellesley, MA 02481
United States

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