1 Breakout #6: The relationship between subsidy and welfare-to- work systems and policies, and the child care and employment patterns of low-income parents Facilitator: Lee Kreader Discussants: Deanna Schexnayder, Gina Adams, Lisa Gennetian, and Lucy Jordan

2 I. The Texas Child Care Subsidy Program After Devolution to the Local Level Presenter: Deanna Schexnayder Authors: Deanna Schexnayder, Laura Lein, Julie Beausoleil, Daniel Schroeder, Ying Tang The University of Texas at Austin Ray Marshall Center for the Study of Human Resources Center for Social Work Research

3 Study Overview Texas devolved some child care policy authority to 28 local workforce boards in September Texas devolved some child care policy authority to 28 local workforce boards in September Project team collected data 2 years prior to and 4 years following devolution: Project team collected data 2 years prior to and 4 years following devolution: Child care subsidy policies and program participation Child care subsidy policies and program participation Local workforce board structure and other features Local workforce board structure and other features Financial allocation and payment information Financial allocation and payment information TANF and UI wage administrative data TANF and UI wage administrative data Provider and market rate data Provider and market rate data County characteristics and economic data County characteristics and economic data Variations across Board areas and over time are reported here; econometric analysis being conducted now Variations across Board areas and over time are reported here; econometric analysis being conducted now

4 Findings Income eligibility ceilings and share of low-income children served vary among the 28 local board areas but all areas are only serving a fraction of those in need. Income eligibility ceilings and share of low-income children served vary among the 28 local board areas but all areas are only serving a fraction of those in need. Boards’ ability to secure local matching funds improved over time. Boards’ ability to secure local matching funds improved over time. Local policies varied considerably in the first two years after devolution. Because all Boards are required to serve TANF (Choices) children first and TANF performance measures tightened over time, policy flexibility diminished in later years. Local policies varied considerably in the first two years after devolution. Because all Boards are required to serve TANF (Choices) children first and TANF performance measures tightened over time, policy flexibility diminished in later years. In response to funding shortages, many boards lowered eligibility ceilings and increased parent co-pays. The state froze reimbursement rates. In response to funding shortages, many boards lowered eligibility ceilings and increased parent co-pays. The state froze reimbursement rates.

5 Findings Initially, local boards were required to spend 4% of their funds on quality initiatives. As local boards were required to serve more children with subsidy dollars, the requirement for local expenditures on quality initiatives was removed. Initially, local boards were required to spend 4% of their funds on quality initiatives. As local boards were required to serve more children with subsidy dollars, the requirement for local expenditures on quality initiatives was removed. The share of care by Texas Rising Star (tiered reimbursement) providers increased in early years but leveled off in Other efforts to maintain quality varied by Board area. The share of care by Texas Rising Star (tiered reimbursement) providers increased in early years but leveled off in Other efforts to maintain quality varied by Board area. Boards varied widely in their perceptions of the policy flexibility available to them. (3 - high flexibility; 4 - flexibility with some constraints; 3 - little flexibility; 8- no flexibility at all) Boards varied widely in their perceptions of the policy flexibility available to them. (3 - high flexibility; 4 - flexibility with some constraints; 3 - little flexibility; 8- no flexibility at all)

6 Questions How equitable is a devolved system for poor children across Texas? (and across U.S.?) How equitable is a devolved system for poor children across Texas? (and across U.S.?) Given restrictions of TANF priority, state performance measures and limited funding, how much authority do local boards really have? Given restrictions of TANF priority, state performance measures and limited funding, how much authority do local boards really have? Do local policy differences translate into differential outcomes for families and markets? (Working on this now; see project posters.) Do local policy differences translate into differential outcomes for families and markets? (Working on this now; see project posters.)

7 II. Child Care Subsidies for TANF Families: The Nexus of Systems and Policies Presenter: Gina Adams, The Urban Institute Authors: Gina Adams, Pamela Holcomb, Kathleen Snyder, Robin Koralek, Jeffrey Capizzano, Patti Banghart, Sara Bernstein Funded by The Child Care Bureau and the John T. and Catherine D. MacArthur Foundation

8 Research Design Research Questions Understanding the administrative intersections between TANF welfare-to-work and child care Understanding the administrative intersections between TANF welfare-to-work and child care Examining what parents and agencies have to do for TANF clients to get and keep subsidies as they move from welfare to work Examining what parents and agencies have to do for TANF clients to get and keep subsidies as they move from welfare to work Identifying coordination issues and strategies Identifying coordination issues and strategies Exploring implications for agencies and clients Exploring implications for agencies and clients Research Design Interdisciplinary team of researchers (child care/welfare-to-work) Interdisciplinary team of researchers (child care/welfare-to-work) Built upon child care and welfare-to-work ANF case studies (1999) Built upon child care and welfare-to-work ANF case studies (1999) Selected 11 sites, conducted phone interviews with child care/ welfare-to-work caseworkers and administrators Selected 11 sites, conducted phone interviews with child care/ welfare-to-work caseworkers and administrators Phase I of three-part study Phase I of three-part study

9 Findings Linking child care and welfare-to-work involves connecting multiple devolved systems to serve to clients going through variable and dynamic trajectories from welfare to work Linking child care and welfare-to-work involves connecting multiple devolved systems to serve to clients going through variable and dynamic trajectories from welfare to work Sites varied widely in their administrative approach Sites varied widely in their administrative approach No clear “best approach” – client burden/administrative coordination issues appear more related to infrastructure, policies, & practices No clear “best approach” – client burden/administrative coordination issues appear more related to infrastructure, policies, & practices TANF/welfare-to-work staff often had responsibility for at least some (sometimes many) child care subsidy functions TANF/welfare-to-work staff often had responsibility for at least some (sometimes many) child care subsidy functions Ease of process for clients/agencies depends upon the cumulative impact of requirements for authorization, recertification, and adjustment of subsidies for interim changes, and their frequency Ease of process for clients/agencies depends upon the cumulative impact of requirements for authorization, recertification, and adjustment of subsidies for interim changes, and their frequency

10 Findings Sites employed various coordination/communication strategies to link agencies/services – generally satisfied Sites employed various coordination/communication strategies to link agencies/services – generally satisfied Sites varied in how tightly they tied eligibility for child care subsidies to participation in work-related activities Sites varied in how tightly they tied eligibility for child care subsidies to participation in work-related activities Agencies reported most parents knew what providers they wanted – though indication from some workers and (some parents) that not always true Agencies reported most parents knew what providers they wanted – though indication from some workers and (some parents) that not always true Several sites required parents to start work-related activities less than 2 weeks after meeting with welfare-to-work case manager Several sites required parents to start work-related activities less than 2 weeks after meeting with welfare-to-work case manager Several sites provided relatively little information/counseling around finding child care unless parents reported a problem Several sites provided relatively little information/counseling around finding child care unless parents reported a problem

11 Questions and Challenges What are the implications of welfare-to-work workers taking on child care subsidy management responsibilities? What are the implications of welfare-to-work workers taking on child care subsidy management responsibilities? How can policy best support the ability of TANF parents to choose high quality stable child care arrangements given: How can policy best support the ability of TANF parents to choose high quality stable child care arrangements given: the short time frame parents have to find care the short time frame parents have to find care the dynamic trajectory and short-term nature of many welfare-to-work activities the dynamic trajectory and short-term nature of many welfare-to-work activities the tight link between parental participation in work activities and subsidy receipt the tight link between parental participation in work activities and subsidy receipt the mismatch between the formal child care market and these realities the mismatch between the formal child care market and these realities How to assess “best practice” when service involves three highly complex, very different, and very devolved systems? How to assess “best practice” when service involves three highly complex, very different, and very devolved systems?

12 III. How Policies Toward Low Income Families Shape Child Care Use Presenter: Lisa Gennetian, MDRC Collaborators: Aletha Huston, Danielle Crosby, and Young Fun Chang, University of Texas at Austin; Edward D. Lowe and Tom Weisner, University of California at Los Angeles; Charles Michalopoulos and Cynthia Miller, MDRC

13 The Analyses Data from random assignment studies testing 21 welfare and employment programs Data from random assignment studies testing 21 welfare and employment programs  Earnings supplements  Mandatory employment services  Time Limits  Expanded child care assistance  20,000 welfare and low-income families Child care outcomes from follow-up surveys Child care outcomes from follow-up surveys  family-level child care decisions and costs  type of care used for children aged 1 to 9 Ethnographic Studies Ethnographic Studies  New Hope: 38 families in Milwaukee  Project on Devolution and Urban Change: 116 families in Cleveland and Philadelphia

14 Findings: Employment, use of care and subsidies Programs increased employment and increased families’ use of paid child care, but had little effect on use of child care subsidies. Programs increased employment and increased families’ use of paid child care, but had little effect on use of child care subsidies. Programs that offered expanded child care assistance increased parents’ subsidy use; lowered out-of-pocket costs; and reduced employment-related problems with child care. Programs that offered expanded child care assistance increased parents’ subsidy use; lowered out-of-pocket costs; and reduced employment-related problems with child care. Many welfare recipients who leave welfare for employment do not report using a child care subsidy. Subsidy use does appear to decrease transition time to employment especially for very low earners. Many welfare recipients who leave welfare for employment do not report using a child care subsidy. Subsidy use does appear to decrease transition time to employment especially for very low earners. From parents’ perspective, flexibility is a crucial component of the child care subsidy system. From parents’ perspective, flexibility is a crucial component of the child care subsidy system.

15 Findings: Type of care arrangements From parent’s perspective, using: From parent’s perspective, using: siblings and relatives, because centers are not open late siblings and relatives, because centers are not open late only close relatives, because of distrust of nonrelatives only close relatives, because of distrust of nonrelatives only center care, because of convenience only center care, because of convenience a patchwork of care, where unregulated or minimally regulated care plays a central role a patchwork of care, where unregulated or minimally regulated care plays a central role Programs with expanded child care assistance increased use of center care more than home-based care; whereas programs without expanded assistance increased use of home-based care more than center care. Programs with expanded child care assistance increased use of center care more than home-based care; whereas programs without expanded assistance increased use of home-based care more than center care. Programs had no effect on use of Head Start. Programs had no effect on use of Head Start.

16 Challenges and open questions What are the direct effects of child care subsidy policies on child care and employment? What are the direct effects of child care subsidy policies on child care and employment? How do these policies affect quality and stability of care? How do these policies affect quality and stability of care? Do and how do child care subsidy policies affect children’s cognitive and socio-emotional development? Do and how do child care subsidy policies affect children’s cognitive and socio-emotional development? How can child care subsidy policies and welfare and employment policies be optimally designed to match family values and routines, as well as unpredictable and nontraditional work schedules? How can child care subsidy policies and welfare and employment policies be optimally designed to match family values and routines, as well as unpredictable and nontraditional work schedules?

17 IV. Child Care Subsidies & Entry to Employment Following Childbirth Lucy P. Jordan & Marcia K. Meyers University of Washington School of Social Work

18 Study Design Secondary data analysis of Fragile Families and Child- Well Being Study Secondary data analysis of Fragile Families and Child- Well Being Study 3 waves, 20 cities, 15 states 3 waves, 20 cities, 15 states Combined with measures of child care subsidy generosity and availability Combined with measures of child care subsidy generosity and availability Expenditures, subsidy priority systems, income eligibility limits, parent copayment, provider reimbursement rate Expenditures, subsidy priority systems, income eligibility limits, parent copayment, provider reimbursement rate Two separate questions Two separate questions Timing of entry to employment Timing of entry to employment Child care stress, job stability Child care stress, job stability

19 Findings TANF subsidy priority (increase likelihood) TANF subsidy priority (increase likelihood) + income eligibility limits (increase likelihood) + income eligibility limits (increase likelihood) + reimbursement rates (decrease likelihood) + reimbursement rates (decrease likelihood) + CCDF/TANF funding (decrease likelihood) + CCDF/TANF funding (decrease likelihood)

20 Findings NoYes Months since birth Graphs by TANF Status, ongoing since before birth of focal child and new cases

21 Questions How well do current measures of child care policy match the policy goals? How reconcile child development and employment related goals? How well do current measures of child care policy match the policy goals? How reconcile child development and employment related goals? How can subsidy systems best support work for moms with young children? How can subsidy systems best support work for moms with young children? How should priorities for who get who gets subsidies and for how long be determined? How should priorities for who get who gets subsidies and for how long be determined? How can we best measure & record these things across multiple locations? How can we best measure & record these things across multiple locations?