Child care subsidies are an effective state strategy to impact:
Both child care subsidy receipt and greater state per child subsidy spending increase maternal employment, and demonstrate improvements in parents’ ability to work. Additionally, child care subsidy receipt and state spending on subsidies are linked to improved access to needed services and greater household resources, although evidence for the impact on these goals is mixed. State child care subsidy policies vary considerably in income eligibility thresholds, the level and manner at which states set subsidy reimbursement rates, and the level of cost burden placed on families. Current evidence does not provide clear guidance to states in making policy choices to ensure child care subsidies increase access to high-quality child care for families with low incomes.
Child care subsidy programs provide financial assistance to help make child care more affordable for families with low incomes. By providing access to child care, subsidy programs may assist parents in securing and maintaining employment and completing education and training. Child care subsidy programs also improve access to high-quality child care for children. Subsidy programs are financed through federal and state funds but are administered by states. To establish and maintain enrollment in a subsidy program, parents must meet both federal and state-specific eligibility requirements. States have considerable flexibility in setting rules on program policies and administration (e.g., eligibility requirements, application procedures, family copayment levels, and provider policies), resulting in substantial state variation in subsidy policy. Further research is needed to provide states with guidance on policy choices that allow families to access high-quality child care with minimal cost burdens.
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Prenatal-to-3 Policy Impact Center. (2023). Prenatal-to-3 policy clearinghouse evidence review: Child care subsidies (ER 07D.1023). Peabody College of Education and Human Development, Vanderbilt University. https://pn3policy.org/policy-clearinghouse/child-care-subsidies
Updated October 2023