Tutrang Nguyen

Child care subsidies play an important role in stabilizing parental employment and helping low- income families access care. With limited federal requirements under CCDBG, states developed divergent subsidy program policies. Our study examines how variations in six state policy levers that capture CCDF administrative burdens and generosity relate to stability in children’s care in the CCDF program, known as subsidy “spells.”: (1) length of eligibility redetermination; (2) reporting requirements for income changes; (3) grace period for care before termination; (4) provider reimbursement rates; (5) parent copay amounts; and (6) difference between initial and continuing eligibility income thresholds. We exploit states’ changes in these policies during a 10- year period (2004-2013) using state fixed effects analyses to identify their impact on spell length. We find that administrative burdens robustly affect child care spell length; increasing states’ redetermination period length by one month increased state median subsidy spell length by 1.4 weeks, but requiring all changes in family income to be reported while enrolled in CCDF decreased spell length by 2.3 weeks. Switching to a 12-month redetermination period increased median spell length by 30%. CCDF policy generosity was not related to spell length. Results are discussed in the context of the 2014 CCDBG reauthorization.

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