Scant Increases After Welfare Reform
Regulated Child Care Supply in Illinois and Maryland, 1996-1998

This is an excerpt from the full report.

Even before the federal government overhauled the welfare law in 1996, most policymakers recognized how essential an adequate supply of child care arrangements is to families moving from welfare to work—indeed to all low-income working families. Child care helps parents balance their responsibilities to work and family and provides children opportunities for healthy growth and development.

Since the 1996 enactment of the Personal Responsibility and Work Opportunity Reconciliation Act, recognition of the importance of the supply of child care has only deepened. The new welfare reform law ended decades-old guarantees of financial support to low-income families through the Aid to Families with Dependent Children (AFDC) program and created a new program, Temporary Assistance for Needy Families (TANF), with sanctions to motivate work participation and time limits on cash assistance. Between 1996 and 1998, sanctions or their prospect helped increase the numbers of low-income families needing child care. In future years, time limits promise to raise these numbers further. Low-income families can now receive cash assistance for a maximum of five years in their lifetimes and a maximum of two years without also working. States can adopt shorter time limits, can define “work” within federal guidelines, and can exempt certain families from the work requirement. Between August 1996 and September 1998, families in welfare caseloads dropped by an average of 34 percent nationwide. Child care is a crucial support for the many families transitioning from welfare to work, for the mounting numbers of families no longer receiving welfare yet still earning low incomes, as well as for low-income working families who have never received cash assistance.

Understandably, policymakers want to know how the supply of regulated child care has grown since welfare reform, particularly in communities with the highest concentrations of low-income families. This report addresses that basic question in two states—Illinois and Maryland. Longitudinal data on the regulated child care supply from the child care resource and referral (CCR&R) networks in Illinois and Maryland, archived at the National Center for Children in Poverty (NCCP), enable the NCCP
Child Care Research Partnership to examine post-welfare-reform changes in child care supply in those two states.

Because child care varies widely from community to community, it must be understood locally. Therefore, this report looks at the distribution of regulated child care within, as well as between, the two states. To do so, NCCP linked CCR&R data on regulated supply with census data on children under age 13 and community concentrations of low-income families in both states. The goal in selecting these two factors is to describe differences between and within the states simply and clearly. Existing research and practitioner knowledge indicate, however, that child care supply responds to a complex economic system. Therefore, NCCP cautions readers that although this paper describes patterns of regulated child care very simply, it does not suggest that policy solutions to enable low-income families to obtain adequate child care can be developed simplistically.

“Regulated” supply refers to all center-based care and all regulated family child care in the two states. This is only one portion of the child care market—those child care centers and family child care homes that are regulated by a state agency (e.g., the state child care licensing entity or state department of education) and/or by the federal government (such as Head Start). Evidence from research provides sufficient information on parents’ preferences and use of care to show that unregulated care—including relative, in-home, and some family child care—is also a very important aspect of the child care supply. An earlier report from the NCCP Child Care Research Partnership, looking at types of vouchered care used by present and former TANF children in the two states, documented families’ use of relative and in-home care in both states.

Community supplies of regulated care are not policymakers’ only concern as they endeavor to strengthen child care systems for low-income families and children. State policies governing child care subsidies and regulation, as well as cash assistance, also have major impacts on low-income parents’ access to the child care they need. A future report from the NCCP partnership will explore relationships among subsidy use, child care supply, and community characteristics in Illinois and Maryland.