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UNIVERSlTY OF CALIFORNIA

Vol. 1 No. 1 Summer 2000

 

Are Child Care
Options
Expanding?

By Linda Jacobson

About this Series

This is the first in a series of policy
briefs which offer a description of
emerging issues, new evidence
and new findings from the PACE
Child Care Planning Project,
funded by the California
Department of Social Services
(CDSS). For more information,
please call Diane Hirshberg,
Project Coordinator, at 510-642-
7223 or visit our website at
http://pace.berkeley.edu.

 

An Imperfect Set of
Choices

An old idea in economics, boosting
purchasing power has become the
novel device to expand working
parents’ ability to buy child care.
Rather than simply building more
child-care facilities, policymakers
have vastly expanded the availabil—
ity of portable child—care vouchers.

There’s no ambiguity over govern—
ment’s interest in expanding early
education and child-care programs.
Since President Bush approved the
first federal child—care program in
1990, outside of Head Start, federal
funding has grown at a rapid clip,
totaling $11 billion annually.

In California, preschool and child—
care funding has more than tripled
since 1996, rising from $800 million
to $2.4 billion in 1999.1 The fastest
growing share is for child-care
vouchers, designed to benefit fami—
lies participating in the California
Work Opportunities and
Responsibility to Kids (CalWORKs)
program, California’s welfare-to—
work initiative, and working families

earning less than 75% of the state
median income.

The question remains whether this
new faith in raising families’
purchasing power is effectively
widening their choices. When
working parents do plug into the
voucher system, what kind of care
are they buying and how good is it?
How does the old policy strategy of
building new centers and subsidiz—
ing licensed child—care homes
intersect with this newfound trust
in vouchers?

Data show that parents in poor
communities still have fewer choices
and are limited by both the cost and
the supply of care that meets their
needs. In addition, changes to the
nation’s welfare system in recent
years have increased demand for
child care. Yet an examination of
subsidy use by families enrolled in
CalWORKs shows that even when
child—care assistance is available,
greater numbers of parents aren’t
necessarily using it.

Research conducted by PACE and
CDSS reveals a wide range of

 

PACE Policy Brief

 

 

subsidy take-up rates in California.
In Los Angeles County, for exam-
ple, administrative data revealed
that just 21 percent of families in a
welfare—to—work activity in June
1999 were using a CalWORKs
child—care subsidy.2 Including other
forms of assistance, such as state
preschool and Head Start, might
lift this utilization rate. Maternal
interviews in San Francisco demon-
strated that 50 percent of
CalWORKs mothers were using
some sort of subsidized care.
Counties may also see increases in
subsidy utilization as CalWORKs
implementation unfolds and as
welfare—to—work plans are refined.

Low subsidy use is not an issue only
for California. New York State this
year doubled the amount of money
budgeted for child care subsidies,
but the money is not getting into
the hands of parents, according to a
report last fall.3 The clog is largely
due to a low supply of child—care
providers and no systematic way to
distribute the money. In Minnesota,
where the state has taken steps to
boost spending on child care and
increase the number of child-care
facilities, one study showed that 60
percent of families eligible for assis-
tance were not using it.4

When parents don’t receive subsi-
dies, for whatever reason, they
often end up paying for child care
with their own money.

For example, a family of three, with
a household income of $15,000,
spends between 24 percent and 45
percent of their income on child
care, according to the report
released last fall by HHS, “Access
to Child Care for Low—Income
Working Families.” If that same
family received a subsidy, their out-

 

of—pocket spending on child care
would drop to between 1 and 7
percent of their income.5

This out—of—pocket spending on child
care also varies significantly across
the country, according to the PACE
Growing Up in Poverty project—a
three-state study of 948 mothers in
welfare programs and their child-care
choices. Relatively few mothers in the
study are paying out—of—pocket for
child care. But on average, mothers
in California and Connecticut who
are eligible for but not using subsidies
are paying close to $300 a month.6

2 Are Child Care Options Expanding?

A survey of 300 parents on child—
care waiting lists in Santa Clara
County, conducted in 1998 by
researchers at PACE, illustrates the
tough choices that low—income
working mothers make while wait—
ing for child—care assistance.7 Many
of the mothers said they were work—
ing more hours in order to afford
the type of care they had chosen,
since they had no hope of receiving
a subsidy any time soon. Many of
these parents also relied on more
than one provider, most of them
informal, to cover the hours they
needed care. This resulted in several
transitions for children throughout
the week and even during the day,
which experts suggest is not good
for young children.

My Are Parents Not Using
Child- Care Aid?

Anecdotal evidence in California,
and elsewhere around the country,
suggests that the process of signing
up for child—care assistance can
simply be too much trouble for a
mother who might not have trans—
portation. Also, entry-level workers
in low—wage jobs usually don’t have
the option of taking a day—or
more—away from work to handle
personal matters.

At What was called a “Parent’s
Convention on Child Care,” spon-
sored by the Human Services
Network of Los Angeles in
November 1999, 270 low-income

 

parents expressed their views on
how to improve child care. Parents
complained of being treated with
disrespect by staff members at the
welfare offices, receiving incorrect
information and needing child care
while they are looking for a job.
Some also said their providers
were withdrawing their services
because they weren’t receiving
payments on time.

While some parents might feel that
navigating the subsidized child-care
system is not worth the effort,
others are managing quite well. One
CalWORIQ mother in Alameda
County, who shared her thoughts at
a focus group, said her caseworkers
had been responsive and informa—
tive: “Actually, they made it so that a
5-year—old could do it. So it’s pretty
self—explanatory, real simple,” she
said about the process of getting her
child—care provider paid. She went
on to say: “I can always call them
and say, ‘Well, I didn’t understand
this. Can you explain it to me? Or
the payment’s running late. Is there
a problem?’ And I get a response.”

A comparison between subsidy
users and non—users in Kern
County shows that there are some
differences between the two popu-
lations. The group using subsidies
is 43 percent white, 34 percent
Hispanic, and 22 percent African—
American. Those not using

Many said they were working more hours in order
to afford the type of care they had chosen.

subsidies are 47 percent Hispanic,
37 percent white and 14 percent
African American. Ninety—nine
percent of those using subsidies
speak English and 1 percent speak
Spanish. But among non—users, 18
percent are Spanish-speaking.
These figures indicate that cultural
and language differences might
contribute to low subsidy use.
While both groups are poor,
another difference was found in the
earnings of the two groups. Non—
users are actually poorer, making
just $593 a month. The median
income of those using subsidies is
about $200 higher.

Child—care vouchers allow mothers
not only to begin working, but also
to become stable, dependable
employees over time. Research
conducted by the National Center
for Children in Poverty (N CCP)
on subsidy use in Maryland and
Illinois shows that access to subsi—
dies is especially critical once
mothers are established in the
workforce. In both states, the
researchers found that the largest
increase in voucher use over the
period of a year was among families
who had already left Temporary
Assistance to Needy Families
(TANF), the federal government’s
cash assistance program. There was
little growth among families who
were currently on welfare.8

“The experience of these states
suggests that, to the degree welfare
reform is successful, significant
numbers of families will continue to
use child care subsidies, if allowed,
after leaving TAN F and their
numbers will build up considerably
over time. Policymakers will want
to consider the needs of this grow—
ing group,” the NCCP report said.

High Use of Kith and Kin
for Child Care

When parents on CalWORKs do
use child—care subsidies, there are
wide variations in the type of care
they are using for their children.
Whether their children are cared
for in licensed centers or family
child—care homes, or in license—
exempt facilities, can depend
largely on where they live.

For example, at the end of June
1999, about 30 percent of children
in CalWORKs families using child
care in Sacramento or Los Angeles
Counties were in licensed child-
care programs. However, in
Alameda and Fresno Counties, the
percentage was almost 50 percent,
while in Santa Clara County, it was
over 50 percent.

A study released last year by PACE
showed that families living in Los

PACE Policy Brief

 

 

Angeles County were half as likely
as those living in San Francisco
County to find a preschool or a
child—care center slot, and would
have about the same luck finding a
family child-care home. A closer
look at Los Angeles County reveals
a severe shortage of licensed child-
care slots in neighborhoods with
high percentages of children, age 0—
5 , in TAN F families.9

Comfort and Cultural Norms
Parents also make choices about
child care based on their cultural
beliefs and the age of their children.
Research from the Growing Up in
Poverty project shows that African-
American mothers were more likely
than white mothers to choose
formal care, whether it was in a
center or a family child—care home.
Asian American mothers were less
likely than whites to choose such
arrangements. Past research has
also found that what Latino moth—
ers prefer for their children is often
at odds with the values they believe
are taught at child—care centers and
preschools.10 Studies also have
shown that mothers prefer that
their infants be cared for in home-
like environments. But when their
children become preschoolers they
want the structure and the opportu—
nities to socialize that center—based
programs provide.

Mothers choose providers based on
a number of rational reasons,

including convenience and flexibil-
ity. Several mothers who
participated in PACE focus groups
expressed that they preferred infor-
mal or relative caregivers because
the arrangements were better able
to accommodate non—traditional
work schedules. “It would be very
difficult finding daycare because I
work until 9 p.m.,” one mother
said. “Not everyone is able to be
with your child that late.” Others
said that their decision was based
almost entirely on whether that
person could provide transporta—
tion, such as picking up a child
from school. And others said they
wanted providers who would take
all of their children, instead of just
certain ages.

Research on informal child—care
arrangements is scarce. But a study
released in 1994 by the Families and

Work Institute, “The Study of
Children in Family Child Care and
Relative Care, ”indicated that many
relatives who care for young chil—
dren are doing it to help out the
working mothers, not because they
want to be child-care providers.11
The Growing Up in Poverty project
is finding generally low quality
among family child-care homes and
other in—home arrangements, such
as relative care and babysitters. The
education levels of the home
providers are lower than those of
the center providers. On a seven-
point scale, the quality of the family
child-care settings ranges between a
two and a three, as compared to
four for the centers. At the same
time, in terms of children—to—adult
ratios and interaction levels between
children and providers, the family
child—care homes scored higher
than the centers in the study.

 

Child Care by County: Total Supply of Licensed Care

 

20

_|
U1

 

Slots per 100 Children
01 8

 

‘3 0 r0
sawed «6‘5“ *6

County

 

Imll
.IIIIII

«\C‘e

0
'\‘5°
«“0 «3&0‘6

we“?

I # slots per 100 children

Source: California Child Care Resource & Referral Network, 1998 and State of California,
Department of Finance, Race/Ethnic Population with Age and Sex Detail, Sacramento, CA

December 1998

4 Are Child Care Options Expanding?

 

Raising the Quality of

Child Care

A 1996 report from the San
Francisco—based Child Care Law
Center stressed that even when
parents using subsidies choose
informal arrangements, steps can
be taken to make that setting more
beneficial to children. First of all,
the report said, parents can be
given more information on the
various forms of child care—
including those that fall under a
state’s regulatory system and those
that do not. “Without steering
parents, objective information
about these differences may result
in some changed decision—
making,” the report said. Likewise,
efforts can be directed toward
providers. The report said, “Many
regulation-exempt family child
care providers will not be inter—
ested in becoming regulated, but
they may be very interested in
learning how to improve their
skills and provide safer, develop—

mentally appropriate care.”12

There is a much larger body of
research on quality in center-based
programs. Most recently, data from
the Study of Early Child Care, a
longitudinal project being
conducted by the National Institute
of Child Health and Human
Development, showed that children
who attend centers that meet
professional standards of quality
score higher on school readiness

High-quality child care not only prepares children
for school, it can also help them succeed once

they get there.

and language tests. Those children
also have fewer behavior problems.13

Another major study, a follow-up to
the 1995 “Cost, Quality and Child
Outcomes in Child Care Centers, ”
found that high-quality child care
not only prepares children for
school, it can also help them
succeed once they get there.
Researchers from four universities,
who followed a sample of children
from the centers through second
grade, found that the children who
attended centers with higher-qual-
ity classroom practices had better
language and math skills in their
preschool years than those who
attended centers that provided
lower-quality care. Furthermore,
the effects of high-quality care on
cognitive and emotional develop—
ment appeared to be stronger for
children whose mothers had only a
high school education or less.14

What Works? Increasing
Subsidy Take-up

The effective use of child—care
subsidies is high among low-
income women in Tampa, Florida,
in sharp contrast to many cities in
California. Data from the Growing
Up in Poverty project show that 50
percent of those who are eligible

for child-care benefits in Tampa are
taking advantage of the subsidies.

Statewide in Florida, there are efforts
to serve as many low-income families
as possible and to make the system
client-fi‘iendly. The State’s
Department of Children & Families
even shifts child—care funds between
counties to cover the needs. The
State encourages employers to share
some of the cost of child—care for
low-income workers since it is in
their interest to have employees that
have dependable child-care arrange—
ments. A fund called the child-care
purchasing pool is used to match
what employers spend to subsidize

child care.

“One-stop” centers in
Hillsborough County, Florida
which combine various social
service offices under one roof,
reduce some of the trips, and possi-
bly some of the frustration, for
those who apply for benefits. In
California, counties such as
Ventura, Placer, El Dorado, and
Sacramento also have pursued this
strategy.

In addition, Florida no longer
requires welfare recipients to
return to the office after their first
six months in the system. Two
months prior to their recertifica-
tion date, the clients receive

PACE Policy Brief

 

 

paperwork in the mail, which they
can fill out and return by post or
bring back in person.

Examples from some agencies in
California show that efforts can be
made to accommodate more
parents and to improve the level of
care that is provided. Crystal Stairs,
a non—profit agency in Los Angeles,
handles a lot of paper work over the
phone with parents and tries to
make the process as smooth as
possible, says Mary Hruby, the
agency’s information services
manager. The agency has also
received a grant to begin offering
training to exempt providers. “Co—
locating” child—care resource and
referral workers inside the welfare
offices is also meant to improve the

level of service parents receive, so
they don’t have to visit two differ—
ent offices.

Lessons on child—care outreach
could be learned from the
Children’s Health Insurance
Program—or CHIP—a $24 billion
program approved by Congress in
1997. All 50 states have now signed
up for the program, which provides
insurance to children whose fami—
lies earn too much to qualify for
Medicaid, but not enough to afford
private health insurance. As of
March 2000, California’s CHIP
program—called Healthy
Families—had enrolled more than
250,000 children, and expansion of
the income eligibility for the
program could add another 129,000

 

Patterns in Child-Care Use Differ by Family Income and by State

60%

 

50%

 

40 0/0

 

30%

 

20°/o

Percentage of Children

1 0°/o

0 0/0

I 200% of the FPL and below
I Above 200% of the FPL

 

State

Source: Urban Institute calculations from its 1997 National Survey of America’s Families.

6 Are Child Care Options Expanding?

statewide. The state’s enrollment
soared from 56,000 in January 1999
to current levels after Governor
Davis streamlined the application
form from twenty-eight pages to
four and allowed families to apply
by mail.15 President Clinton also
has directed officials to spread
information about the program
through the schools in an effort to
enroll more children. When
parents sign their children up for
subsidized lunch programs, they
now receive information about

CHIP as well.

A similar strategy, geared toward
increasing the use of child-care
subsidies, was used in Alameda
County in November 1999. A card
giving step—by-step information on
how to apply for child—care assis—
tance was mailed along with
benefit checks to all CalWORKs
recipients in the county—more
than 17,000 people. Angie
Garling, a child-care resource and
development specialist for the
county’s social services depart-
ment, said it’s too soon to know
whether the cards will increase the
use of subsidies, but she’s hoping
they will have a positive effect.

In an effort to extend more child—
care funds for families that need it,
Alameda County is trying to deter-
mine whether some children are
already being served by other state

.C. BERKELEY LIBRARIES

Cll‘ibll75l38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or federally funded programs (such
as Head Start or state preschool
programs) and direct subsidies to
families not currently using them.
In short, the political will aimed at
broadening families’ access to child
care has risen steadily over the past
decade. Policymakers—at state and
federal levels—have been moved by
a blossoming interest in young chil-
dren’s school readiness, climbing
maternal employment rates, and a
push on low—income women to
move from welfare to work.

But more money alone is not
widening child—care options nor
equalizing access. The actual use of
vouchers remains low and uneven
across counties and states. The
number of new centers and
preschools is creeping upward
slowly. Many parents then choose
informal care arrangements, rather
than go on waiting lists for center-
based care. And with modest
reimbursement rates and high staff
turnover, it’s difficult for centers
and preschools to expand and
remain viable economically.

Policymakers might attend to the
growing voucher system and build
center—based infrastructure simulta—
neously. With expansion of
subsidies for working poor and
welfare—poor families, state and
local policymakers should intensify
their attention to effective imple-
mentation of child care projects.

“One-stop” centers reduce some of the trips, and
possibly some of the frustration, for those who
need to apply for benefits.

Welfare children in Connecticut and Florida are entering low-quality child
care centers, but quality is relatively high in California...

Quality Index

 

Excellent 7

Good 5

 

Mediocre 3

Poor 1

 

California Florida

Connecticut
Average Center Quality

I Centers serving welfare children
I Centers serving wider range of families (based on prior national studies)
Source: Source: Fuller, Bruce, Sharon Lynn Kagan, et al. (2000). Remember the Children:

Mothers Balance Jobs and Child Care Under Welfare Reform. Berkeley and New Haven:
UC Berkeley and Yale University, PACE Growing Up in Poverty Project.

 

...But welfare children in all three states are entering low-quality child
care homes

Quality Index

 

Excellent 7

Good 5

 

Mediocre 3

 

 

Poor 1

California Florida

Connecticut
Average Child Care Home

I Homes serving welfare children
I Homes serving wider range of families (based on prior national studies)

Source: Fuller, Bruce, Sharon Lynn Kagan, et al. (2000). Remember the Children: Mothers
Balance Jobs and Child Care Under Welfare Reform. Berkeley and New Haven: UC
Berkeley and Yale University, PACE Growing Up in Poverty Project.

About the author

Linda Jacobson has written about
education, child care, welfare
reform and family issues for almost
ten years.

PACE Policy Brief

Policy Analysis for California
Education (PACE)

School of Education

3653 Tolman Hall

Berkeley, CA 94720-1670
Phone: 510-642-7223

URL: http://pace.berkeley.edu

1 Fuller, Bruce, Sharon Lynn Kagan, et al.

(2 000). Remember the Children: Mothers Balance
jobs and Child Care Under Welfare Reform.
Berkeley and New Haven: UC Berkeley and Yale
University, PACE Growing Up in Poverty
Project.

2 Relying solely on administrative data, 20%
of clients eligible for Stage 1 funds through the

county welfare department are drawing subsidies.

. 3 Hernandez, Raymond (October 25, 1999).
“Millions in state child care funds going unspent
in New York.” New York Times.

4 Hopfensperger,]ean (November 20, 1999).
“Child—care subsidies helping, but many don’t
use them.” Minneapolis Star Tribune.

5 US. Department of Health and Human
Services (1999). Access to Child Care for Low-
Income I/Vorking Families. Washington, DC: US.
Department of Health and Human Services.

6 Fuller, Bruce, Sharon Lynn Kagan, et al.
(2000). Remember the Children: Mothers Balance
jobs and Child Care Under I/Velfare Reform.
Berkeley and New Haven: UC Berkeley and Yale
University, PACE Growing Up in Poverty
Project.

7 Coonerty, Casey and Tamsin Levy (1998).
PVaitingfiir Child Care: How do Parents Adjust to
Scarce Options in Santa Clara County.2 Berkeley,
CA: University of California, PACE.

8 National Center for Children in Poverty
(1999) Patterns and Growth of Child Care Voucher
Use by Families Connected to Cash Assistance in
Illinois and Maryland. New York: Columbia
University.

9 PACE and California Child Care Resource
& Referral Network (1999). Child Care Indicators
1998, Part II. Berkeley, CA: University of
California, PACE.

10 Fuller, Coonerty, Choong, and Kipnis
(1998). An Unfair Head Start: California Families
Face Unequal Access to Child Care. Berkeley, CA:
University of California, PACE.

11 Families and Work Institute (1994). The
Study of Children in Family Child Care and
Relative Care. New York: Families and Work
Institute.

12 Child Care Law Center (1996). Regulation-
Exempt Family Child Care in the Context of Publicl)l
Subsidized Child Care: An Exploratory Study. San
Francisco: Child Care Law Center.

13 American Journal of Public Health Ouly,
1999). “Child Outcomes When Child Care
Center Classes Meet Recommended Standards
for Quality.” From the Study of Early Child
Care. Washington, DC: National Institute of
Child Health and Human Development.

14 Peisner—Feinberg, Burchinal, Clifford,
Yazejian, Culkin, Howes, Byler, Kagan and
Rustjci (1999).”The Children of the Cost,
Quality and Outcomes Study Go to School.”
Chapel Hill: University of North Carolina.

15 Office of the Governor (November 23,
1999 and March 21, 2000). Press Releases.
Sacramento, CA, and personal communication,
Peter Anderson, Public Information Officer,
Managed Risk Medical Insurance Board,]une
6, 2000.

 

PACE

Graduate School of Education

3653 Tolman Hall

University of California

Berkeley, CA 94720-1670

 

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Organization
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