Child Care Expenses of America's Families

Child CareExpenses ofAmerica’sFamiliesLinda Giannarelli James BarsimantovOccasional Paper Number 40Child CareExpenses ofAmerica’sFamiliesAn Urban Institute Program to Assess Changing Social PoliciesAssessingthe NewFederalism Child CareExpenses ofAmerica’sFamiliesLinda Giannarelli James BarsimantovOccasional Paper Number 40An Urban Institute Program to Assess Changing Social PoliciesThe Urban Institute2100 M Street, N.W.Washington, DC 20037Phone: 202.833.7200Fax: 202.429.0687E-Mail: paffairs@ui.urban.orghttp://www.urban.org Copyright © December 2000. The Urban Institute. All rights reserved. Except for short quotes, no part of thisbook may be reproduced in any form or utilized in any form by any means, electronic or mechanical, includingphotocopying, recording, or by information storage or retrieval system, without written permission from theUrban Institute.This report is part of the Urban Institute’s Assessing the New Federalismproject, a multiyear effort to monitorand assess the devolution of social programs from the federal to the state and local levels. Alan Weil is the pro-ject director. The project analyzes changes in income support, social services, and health programs. In collabo-ration with Child Trends, the project studies child and family well-being.The paper has received funding from The Annie E. Casey Foundation, the W.K. Kellogg Foundation, The RobertWood Johnson Foundation, The Henry J. Kaiser Family Foundation, The Ford Foundation, The David andLucile Packard Foundation, The John D. and Catherine T. MacArthur Foundation, the Charles Stewart MottFoundation, The McKnight Foundation, The Commonwealth Fund, the Stuart Foundation, the Weingart Foun-dation, The Fund for New Jersey, The Lynde and Harry Bradley Foundation, the Joyce Foundation, and TheRockefeller Foundation.The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consid-eration. The views expressed are those of the authors and should not be attributed to the Urban Institute, itstrustees, or its funders. Assessing the New Federalismis a multiyear Urban Institute projectdesigned to analyze the devolution of responsibility for social programsfrom the federal government to the states, focusing primarily on healthcare, income security, employment and training programs, and social ser-vices. Researchers monitor program changes and fiscal developments. In collaborationwith Child Trends, the project studies changes in family well-being. The project aimsto provide timely, nonpartisan information to inform public debate and to help stateand local decisionmakers carry out their new responsibilities more effectively.Key components of the project include a household survey, studies of policies in 13states, and a database with information on all states and the District of Columbia,available at the Urban Institute’s Web site. This paper is one in a series of occasionalpapers analyzing information from these and other sources.About the Series ContentsIntroduction 1The National Picture3Child Care Expenses of America’s Families 3Child Care Spending Patterns of Families with Younger Children Compared with Families with Older Children 4Child Care Spending Patterns of Single-Parent Families Compared with Two-Parent Families 5Child Care Spending Patterns of Low-Earning Families Compared with Higher-Earning Families 6Child Care Expenses of Lower-Earning Families: A Closer Look 9Summary of the National-Level Picture 10The State-by-State Picture 11Child Care Expenses across the States, for All Families Combined 12Child Care Expenses across the States, for Families with Children under Age 5, Single-Parent Families, and Low-Earning Families 14Summary of the State-Level Picture17Conclusions17Notes 19References 21Appendix 22About the Authors 27 Child Care Expenses of America’sFamiliesIntroductionIn working families with children, child care expenses can consume a large por-tion of the family budget. Not all families pay for care—either because they do notuse child care or because they receive it at no charge. But in families that do pay forcare—especially low-income families—the expenses can be significant. Child careexpenses may erode the financial benefits of employment, affecting whether a familycan “get by” on relatively low earnings without public assistance.The affordability of child care has become an issue for greater numbers of low-income families as millions have left the welfare rolls for employment since the mid-1990s. Child care subsidies are not an entitlement, and not all low-income familiesreceive help. For instance, the primary source of federal funding for subsidized childcare—the Child Care and Development Fund—serves only 10 percent to 15 percentof the children who are eligible for those subsidies (U.S. Department of Health andHuman Services 1999). Most fam