States Are Expanding Child Care Subsidy Programs for Low-Income Families

In response to welfare reform, the seven states we reviewed are expanding funding for child care programs. States’ ability to meet the anticipated increased demand for child care will depend on future levels of state child care funding as well as on changes in demand for child care subsidies resulting from welfare reform’s work participation requirements. States Are Initiating Efforts to Ensure Adequate Supply of Providers

Welfare and child care program officials in six of the seven states report that with the additional funds available under the CCDF, the supply of child care appears so far to have kept pace with increases in demand. Most States Are Maintaining or Increasing Standards for Child Care Providers

At the same time that states are expanding their programs and attempting to increase supply, they appear to be maintaining child care standards and enforcement practices. Conclusions

deciding who will be served through the programs. In addition, although the seven states have many initiatives under way to expand their supply of child care providers, the outcomes of their efforts are not yet known. Moreover, it is too soon to know what kinds of child care states and parents will rely on as more parents are expected to support themselves through work.
Why GAO Did This Study

GAO discussed how child care programs are changing at the state level through the revisions in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, focusing on: (1) how much federal and state funds states are spending on child care subsidy programs and how they are allocating these resources; (2) how states are trying to increase the supply of child care to meet the projected demand under welfare reform; and (3) the extent to which states are changing standards for child care providers in response to the anticipated increased demand under welfare reform.

What GAO Found

GAO noted that: (1) its findings provide an early indication that the seven states it reviewed are using additional federal dollars and their own funds to expand their child care programs to serve increasing numbers of welfare recipients required to work and at least some of the working poor; (2) in addition, states are making efforts to further increase the supply of child care by funding initiatives to support and encourage the entrance of new child care providers into the market; (3) at the same time, the states that are expanding their programs and attempting to increase supply appear to be maintaining child care standards and enforcement practices; and (4) however, it is too early to know how effective these efforts will be in meeting the child care needs of low-income families.