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Examining Cost Fulfillment: Child Care Policy andStrategiesLucy Porter Jordan aa Social Work Studies , University of Southampton, Economic and Social Research CouncilCenter for Population Change, Faculty of Social and Human Sciences , Southampton , UnitedKingdomPublished online: 02 Dec 2011.

To cite this article: Lucy Porter Jordan (2012) Examining Cost Fulfillment: Child Care Policy and Strategies, Journal of SocialService Research, 38:3, 313-329, DOI: 10.1080/01488376.2011.633817

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Journal of Social Service Research, 38:313–329, 2012Copyright c© Taylor & Francis Group, LLCISSN: 0148-8376 print / 1540-7314 onlineDOI: 10.1080/01488376.2011.633817

Examining Cost Fulfillment: Child Care Policy andStrategies

Lucy Porter Jordan

ABSTRACT. Most advanced industrialized countries have established social support to aid families inbalancing productive and reproductive labor during child-bearing years. Secondary data analysis wasused to examine patterns of public support for low-income working families. Key findings highlightfour types of policy strategies (Conservative, Limited, Average, and Universal) suggesting differen-tiated social citizenship opportunities based on place of residence. This research highlights how acomplex policy environment contributes to unintended consequences as the working poor are exposedto child care and employment instability. Future research should consider how the policy environmentcontributes to material well-being in families during the life course.

KEYWORDS. Child care, gender, employment, social policy

The United States, like many advanced in-dustrialized nations, bestows the social rights ofsocial citizenship through participation in the la-bor market. Social rights in conjunction with po-litical and civil rights form the tripartite socialcitizenship model conceptualized by T. H. Mar-shall (1950). Although the 20th century has seensignificant gains in the distribution of these rightsto previously excluded groups in the UnitedStates, the social rights of economic welfare andsocial security remain perhaps more elusive withevidence of stratification along many status char-acteristics including gender, race, and ethnicity.The U.S. social welfare state was created in theNew Deal era of the 1930s and provides socialprotections for citizens engaged in full-time for-mal labor market activities. A fundamental partof this original social contract was the exclu-

Lucy Porter Jordan, PhD, is a Lecturer in Social Work Studies, University of Southampton, Economic andSocial Research Council Center for Population Change, Faculty of Social and Human Sciences, Southampton,United Kingdom.

Address correspondence to: Lucy Porter Jordan, PhD, University of Southampton, ESRC Center for Pop-ulation Change, Faculty of Social and Human Sciences, Highfield Campus, Murray Building, SouthamptonSO17 1BJ, United Kingdom (E-mail: L.P.Jordan@soton.ac.uk).

sion of essential functions of home labor pro-duction, the uncompensated labor of mothersand wives that formed the backbone of mostfull-time waged labor. Such labor was likely toresult in greater independence of another person(Lewis, 1998). Thus, the economic security ofwomen was one constructed of dependency—ona male breadwinner or, if morally deserving ongendered terms, on the nation state. The consid-eration of gender in relation to social policy andwelfare state provisions is essential for under-standing how women are potentially excludedfrom exercising their full social citizenship rightsof economic security and social welfare becauseof their responsibilities for caring labor.

During the past 20 years, the U.S. federal gov-ernment increasingly has emphasized the devo-lution of means-tested social welfare programs

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to the state level and has provided a type of nat-ural laboratory to examine differences in cross-state configurations of state programs. The cur-rent study capitalizes on this variation acrossthe country to investigate how indigent and low-income mothers manage to combine caregivingobligations and labor force participation withvarying degrees of government support. Becausestate and more local levels of government havesuch discretion in the design and implementa-tion of many of their social welfare programs,packages of support are likely to result in geo-graphic variation in policy decisions and admin-istrative rules and practices for encouraging andsupporting self-sufficiency among this vulnera-ble population.

The following analysis uses a variant of apolicy regime approach to examine the interac-tive relationships between multiple features ofthe child care subsidy delivery system. This ap-proach, popularized through its application tothe examination of cross-national welfare stateconfigurations (the “welfare regime approach”),depends on the examination of a number ofinstitutional and policy dimensions (Esping-Anderson, 1990). Measuring a single policy di-mension such as expenditures can fail to cap-ture important institutional dimensions that de-termine the type, generosity, and inclusivenessof social benefits. This framework is especiallyapplicable in the study of much U.S. social pol-icy because of the federalist structure of the U.S.government. Not all U.S. social programs areamenable to this type of analysis; mainstream so-cial insurance programs, such as Social Security,are federalized programs based on employment-based contributions. However, many other socialprograms, most generally those that are means-tested transfer programs targeting the poor andlone parent families with children (such as cashwelfare and child care subsidies, which are thefocus of this study), are localized to the state,county, or lower levels of government. This vari-ant of the policy regime approach has been usedin previous social welfare research. One exten-sion of the policy regime approach is using clus-ter analytical techniques to characterize U.S.states on 11 different social and health policy di-mensions (Meyers, Gornick, & Peck, 2001). Fiveregimes were identified, and in subsequent anal-

yses, the regimes predicted patterns of spendingand, of particular relevance to the current study,levels of participation across a range of socialand health programs.

The next section provides background on thecurrent child care policy context and the his-torical development of means-tested support forpoor women within the United States, with a par-ticular focus on recent developments during thelast quarter of the 20th century. This is followedby information on the data sources and researchmethodology. Cluster analytical techniques areused to distill policy indicators into multidi-mensional policy regimes at the city–state level.Policy levers may have different and even com-peting goals such as increasing maternal em-ployment and rationing of scarce resources(child care subsidies) through targeting of spe-cific populations resulting in conflicting behav-ioral incentives and necessitating the simultane-ous consideration of multiple indicators withinthe substantive area of social welfare policy un-der consideration. The article closes with discus-sion about the implications of different regimetypes and future directions for social welfare pol-icy that can support reproductive and productivelives of indigent and low-income women.

BACKGROUND AND PREVIOUSSTUDIES

Women’s Work

Traditionally, women in the United States,much as women throughout the world, havebeen responsible for providing the lion’s shareof caregiving to child and adult dependents. So-cial norms and expectations regarding women’slabor—as caregivers in the home or as laborers inthe market—are reflected in the current and his-torical structure of U.S. child care policies. Theearliest public effort to address the issue of sub-stitute child care in the United States was the daynursery of the early 20th century (Mink, 1995).The day nursery, influenced strongly by mater-nalist values, provided physical and moral su-pervision to economically disadvantaged moth-ers and their children and was never intended tosupport women’s paid employment.

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It was the 1935 Social Security Act that cre-ated the first national program of cash assistanceto mothers with dependent children, the Aid toDependent Children (ADC) program, later re-named the Aid to Families With Dependent Chil-dren (AFDC) program. This program was de-signed to compensate lone mothers for stayingat home with their dependent children. The daynursery and ADC programs were entirely sepa-rate. AFDC caseloads expanded substantially inthe 1960s and early 1970s as barriers to eligibil-ity (employment rules, residency requirements)and moral supervision practices (house raids andsuitable home tests) were relaxed. These policychanges coincided with dramatic changes in thedemographics of welfare recipients because ofthe 1960s civil rights movement. It was esti-mated that approximately 3% of the recipientsof ADC in the 1930s were African American andthat half of these recipients lived in two states,Ohio and Pennsylvania (Mink, 1995). At leastfour of the Southern states, where 90% of theAfrican American population resided, did notoffer any type of mother’s pensions. The orig-inal ADC caseloads were dominated by Whiterecipients but by 1967, the welfare caseload wasmore than 46% non-White (Mink).

The shift in policy changes starting in the1960s coincided with changing expectationsabout gender roles and participation in paid em-ployment for women of all social classes aswell as a rise in public sentiment that individ-uals on welfare, including lone mothers, wereamong the undeserving poor. Despite increasingcriticism of the lack of work ethic among wel-fare recipients, policymakers did little to expandemployment supports, including child care, forthose receiving assistance in the 1960s and 1970s(O’Connor, 2001). As part of the larger GreatSociety program of the 1960s, Congress did es-tablish the Head Start program, the first federalprovision of early childhood education for poorchildren, which provided partial day-time hourssupervision for children of economically dis-advantaged families (Committee on Ways andMeans, 2004). However, Head Start remains tothis day an educational program, separate fromemployment support.

In 1976, the U.S. congress began provid-ing limited tax-based assistance for child care

through the Child and Dependent Care TaxCredit (CADC), legislating publicly the link be-tween market employment and family caregiv-ing for the first time. Because tax credits areavailable only for those who were employedand incurred an income tax liability (i.e., theywere nonrefundable), the CADC primarily ben-efited middle-class families. Child care policiesaimed at indigent women were expanded some-what later and largely as a part of revisions tothe AFDC. The Omnibus Reconciliation Act of1981 made substantial changes to the AFDCprogram, followed by the Family Support Actof 1988 (FSA), which marked the first federalpolicy initiative to aggressively enforce employ-ment as a condition of public assistance re-ceipt; this requirement marked a stark contrastto the maternalist policies from the turn of thecentury (O’Connor, 2001).

The FSA appropriated $1 billion annually toencourage employment through activities suchas employment training and education among re-cipients of AFDC and also included provisionsto support substitute child care through cate-gorical entitlements within the existing AFDCprogram. This program laid the foundation forthe passage of the Personal Responsibility andWork Opportunity Reconciliation Act of 1996(PRWORA) that mandated market employment(or employment-related activities) as a require-ment for aid for a much larger share of the wel-fare caseload. The PRWORA required moth-ers receiving cash welfare (including mothersof infants and toddlers) to meet new work re-quirements, instituted lifetime time limits for re-ceipt of public assistance, and revised eligibilitycriteria. During the same time period, federallawmakers further increased federal (and statemandatory and matching) funding for child careassistance for low-income families to the ChildCare and Development Block Grant (CCDBG),which was established in 1990 specifically tosupport child care for low-income working fam-ilies, the “working poor,” not connected to thecash welfare system (National Child Care In-formation Center, 1998). The increased fund-ing was earmarked not only for those receiv-ing public assistance but also for those at riskfor welfare receipt, those transitioning off, andsome working-poor families. With the passage

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of PRWORA, the various child care fund-ing streams were consolidated into two mainprograms, Temporary Aid for Needy Families(TANF) child care and the Child Care and Devel-opment Fund (CCDF), which replaced CCDBG.

Current Funding Streams: WelfareMothers and the Working Poor

The PRWORA of 1996 that created the newTANF program clearly linked welfare receiptwith market employment activity and earmarkedfunds to provide child care support for moth-ers during the period of welfare receipt. Atthe time of implementation of the new TANFprogram, a number of states already had somechild care programs in place to target both poorand working-poor families attached to differentfederal funding sources including a variety ofAFDC child care programs, the Title XX SocialService Block Grant (SSBG), and the CCDBG.PRWORA mandated structural changes in gov-ernment child care assistance programs, mostnoticeably by consolidating the different fed-eral child care assistance programs into threeblock grant funding streams, SSBG, TANF, andCCDF, which serve three different populations.PRWORA also devolved considerable responsi-bility to the state level via the block grant mech-anism to allow for greater state innovation.

Of note, only one of the three child care fund-ing streams is specifically designed with thesole intention of providing child care assistanceand to a lesser extent providing incentives forquality improvements in child care services: theCCDF. The CCDF funding stream specificallytargets child care assistance for working-poorfamilies and requires that a minimum of 4%of the grant is set aside for quality improve-ments (National Child Care Information Center,1998). The CCDF is the most flexible program,whereby states and lower levels of locality candesign service delivery systems with minimalgovernment stipulation. These allowances pro-vide some incentive for the transfer of TANFfunds to CCDF.

The TANF child care funding is the least flexi-ble program because recipients of TANF fundingmust be involved with the TANF system. TANFchild care supports subsidized care for children

of TANF recipients, with a payment mechanismconsisting primarily of child care vouchers com-bined with some provider contracts. States havethe authority to transfer up to 30% of their TANFblock grant into CCDF (Committee on Ways andMeans, 2004).

The third funding stream, the SSBG, supportsa wide range of social service functions for adultsand children, including child care. States havediscretion regarding the transfer of up to 10%of their TANF block grant into SSBG (U.S. De-partment of Health & Human Services, 2004).The only stipulation for the use of the trans-ferred funds is for expenditures related to eco-nomically disadvantaged children and families,though not necessarily for expenditures relatedto child care, and the total combined TANF trans-fer funds to SSBG and CCDF may not exceed30%.

During the period 1996 to 2000, there weresignificant increases in child care assistance ex-penditures as well as total number of enrolledchildren. Expenditures on child care assistancefor TANF and CCDF (and their predecessor pro-grams) nearly doubled during the time period(Gish, 2002; U.S. Department of Health & Hu-man Services, 2006), while enrolments doubledfrom 1 million to more than 2 million children(Mezey & Richie, 2003). It was estimated thatthe number of children receiving assistance inFY2005 represented only a fraction, 29%, ofthe federally eligible children (Assistant Secre-tary for Planning and Evaluation, 2008; Mezey,Greenberg, & Schumacher, 2002). This incon-sistency between significant expansions and un-met need reflects the ambivalence in definingwomen’s and states’ roles in care giving andis reflected in disparate policy structures (childcare for educational enrichment vs. child careas employment support), governance structures,and incomplete funding that leaves states to rec-oncile competing demands.

Child Care Subsidy Systems

A number of different features of regulatoryand legislative policy as well as administrativepractices are involved in the operations of a childcare subsidy system. For example, eligibilityinclusion based on percent of state median

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income (SMI) does not necessarily guaranteereceipt of a subsidy. Research suggests thatalthough levels of federal funding for child caresupport have increased steadily since the pas-sage of PRWORA, the amount appropriated isnot sufficient to serve all of the income-eligiblefamilies (Giannarelli, Adelman, & Schmidt,2003; Lawrence & Kreader, 2005; Levy &Michel, 2002; Meyers, Heinze, & Wolf, 2002).There are a number of different policy leversavailable for states to use in the design of theirchild care systems. The federal governmentsets general guidelines for child care subsidyprograms, but it is the state and lower levels ofgovernment that make decisions regarding eligi-bility and generosity of the child care subsidies.These decisions are based on a number of policydimensions such as income eligibility limits,copayments by families, reimbursement ratesto providers, subsidy application and eligibilityprocesses, and waiting lists (Adams, Snyder, &Sandfort, 2002; Blau, 2001; Blau & Tekin, 2007;Levy & Michel; Meyers et al., 2002). Previousstudies point toward significant variation inthese regulations and practices across the UnitedStates (Adams et al.; Meyers et al., 2001). Thisvariation affects initial and continued receipt ofsubsidies for income-eligible working parentsand creates subsidy systems that are easier, oralternatively more difficult, to access.

One set of policies affects subsidy receiptthrough eligibility and price incentives. Statesare permitted (by the federal government) to useCCDF funds to provide assistance to familieswith income up to 85% of the SMI, althoughstates may lower the income ceiling, effectivelyreducing the number of families served. In 2000,only eight states set their income eligibility limitat 85% SMI, and by 2002, only five states settheir income eligibility limit at 85% SMI (Levy& Michel, 2002; National Child Care Informa-tion Center, 2001, 2002). Higher income eligi-bility limits likely increase the potentially eli-gible population. However, eligibility is neithera direct determinant nor guarantee of subsidyreceipt.

States also set parent copayment policies. Onerationale for higher copayments is that copay-ments encourage greater accountability amongparents or caregivers and contribute toward pol-

icy goals of promoting self-sufficiency (Blau,2001). Higher copayments additionally may al-low for the provision of smaller subsidies to alarger proportion of an eligible population. Thus,a higher copayment could result in an increase inthe number of subsidy recipients overall. How-ever, higher copayments could contribute to areduction in observed subsidy receipt for lower-income families who may be priced out of par-ticipation in a subsidy program due to the cost(Schulman & Blank, 2004). One way that highercopayments may be offset is through a waiverregulation. Many states, but not all, allow for thewaiver of copayments for families at or belowthe poverty level. Copayments are thus a policytool that can influence the rationing of subsi-dies. Subsidy take-up among otherwise eligiblepopulations is potentially discouraged by highcopayments, and other policy tools such as awaiting list may indicate that demand is greaterthan available supply.

Processes related to subsidy application, el-igibility determination, and recertification alsoinfluence the likelihood of initial and contin-ued subsidy receipt. Accessibility of the subsidysystems is a feature that can influence multiplestages of the subsidy process including initialand continued eligibility determination and therequired reporting of ongoing changes in fam-ily status (Adams et al., 2002; Herbst, 2008). Ifaccessibility is required in person during busi-ness hours, as is often the case when a state orcounty agency administers the program, this canhave negative consequences for a working par-ent who will have to miss paid employment tomeet agency protocol and maintain the subsidy.Access to the system also varies as to whetheror not families can apply for new or continuedsubsidies via postal mail, telephone, online, fax,or only in person. System complexity refers tofeatures such as the presence or absence of link-ages between the TANF and CCDF systems (i.e.,whether the recipient needs to reapply whenleaving TANF, whether the offices are in dif-ferent locations) and paperwork burden. Finally,features such as eligibility recertification vary inlength from 3 months up to 12 months. Thesesystem features affect subsidy take-up by in-creasing or decreasing the transaction costs foreligible participants.

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The package of child care policy tools andsubsidy administrative apparatus can thus act tostructure (or limit) the availability, accessibility,and associated transaction costs of subsidies andinfluence participation in the subsidy program.The current analysis examines the following re-search questions:

1. To what extent are child care policychoices correlated across policy charac-teristics and across TANF and CCDF pro-grams?

2. Considering multiple programs and policycharacteristics simultaneously, are theregeographic clusters of states that providesimilar policy packages?

METHODOLOGY

Sample

The data set consists of 14 indicators of childcare policy and TANF policy that were derivedfrom a variety of extant data sources and com-piled and coded by the author (see AppendixA for the complete list of coding and sources).The sample consists of 20 cities located in 15different U.S. states. The sampling frame isbased on the locations included in the FragileFamilies and Child Well-Being Study (FragileFamilies; see Reichman, Teitler, Garfinkel, &McLanahan [2001] for a detailed description ofthe Fragile Families Study). The current analy-sis is part of a larger study examining linkagesbetween policy measures, child care subsidiesand employment–family balance. Based on theFragile Families data, there is substantial varia-tion in the observed rate of child care subsidiesat the 1-year follow-up (2000–2002) as illus-trated in Table 1, which provides motivation forthe analysis of child care policy strategies acrossdifferent geographical locations. While the av-erage rate of subsidy receipt across all cities is10%, city variation is wide with the minimumrate of 3% (New York City and Chicago) com-pared with the maximum rate of 21% (Oakland,CA).

All of the policy indicators are measured at thestate level, and the data are anchored to the base-

TABLE 1. Subsidy Rates by City for AllMothers: First Follow-Up

City Rate

Austin 19%Baltimore 7%Boston 12%Chicago 3%Corpus Christi 8%Detroit 14%Indianapolis 13%Jacksonville 5%Milwaukee 15%Nashville 16%New York 3%Newark 9%Norfolk 4%Oakland 21%Philadelphia 15%Pittsburgh 6%Richmond 6%San Antonio 13%San Jose 7%Toledo 11%Overall Average 10%

Note. Unweighted data.

line year of data collection for Fragile Families,which occurred 1 year prior to the first follow-up. Although there is variation at the county andcity levels for some of the dimensions of thesepolicies, obtaining comparable data across anyof the measures for the 20 cities was not pos-sible; the analysis therefore relied exclusivelyon state-level data. The timing of baseline datacollection was staggered over 3 years and ledto variation in many of the measures at the citylevel within a common state (e.g., Oakland andSan Jose, CA).

Policy Data

The next two sections describe the child careand TANF policy data (see Table 2) used inthe analysis and present descriptive informationabout how the different indicators vary across thesample to address the first descriptive researchquestion.

Child Care Policy Data

Subsidy application is an ordinal measure ofthe flexibility of local application procedures.

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TABLE 2. Variation in Child Care and TANF Policy Characteristics

Mean SD Minimum Maximum

Child Care PolicySubsidy Application 1.55 0.76 1.00 3.00Subsidy Eligibility 2.05 0.83 1.00 3.00Income Eligibility 62% 12% 45% 85%Eligibility Duration 7.50 2.67 6.00 12.00Waiting List 0.65 0.49 0.00 1.00Subsidy Commitment 0.50 0.51 0.00 1.00Parent Copayment $56 $38 $0 $118Monthly Reimbursement Rate $720 $202 $383 $1,094

TANF PolicyTime Limits 0.73 0.30 0.50 1.00Diversion 0.45 0.51 0.00 1.00Family Cap 0.55 0.48 0.00 1.00Sanctions–Who 0.78 0.26 0.50 1.00Sanctions–How Long 20.08 34.79 0.50 99.00Maximum Benefit $394 $164 $185 $699

Note. Policy year corresponds to year prior to 12-month follow-up by city for Fragile Families data.

The most common options for submitting asubsidy application are in person, via tele-phone, and via postal mail. Applications that areonly handled in person are considered the leastflexible; medium flexibility includes one addi-tional option to submitting in person, and themost flexible includes three or more options.The most common type of application proce-dure was in-person only. Subsidy eligibility is anordinal measure that quantifies the accessibilityof agencies authorized to determine eligibility.One or more agencies may have authorizationto determine the eligibility of subsidy receipt: astate/county lead agency, private voucher man-agement, or both. The most restrictive eligibil-ity agency is considered the lead state/countyagency because this will operate during busi-ness hours only, which can increase the trans-action costs for working parents. The vouchermanagement agency only is considered mediumrestriction because hours of operation are notconfined to business hours. A choice of both isconsidered the least restrictive. The most com-mon type of agency was a government office orother lead agency, followed by a combination ofgovernment and voucher management.

Income eligibility limits are a key feature usedin the determination of subsidy eligibility. Theaverage income eligibility limit is 62%, with alow of 45% in Chicago compared with a high

of 85% in Boston and Norfolk. Eligibility dura-tion measures how many months before anothereligibility determination is required. Eligibilityduration ranges from 6 to 12 months, with an av-erage length of 7.5 months. The waiting list mea-sure is a binary variable that indicates the pres-ence or absence of a subsidy waiting list; a littlemore than one half of the cities have waiting lists.Parent copayment measures the monthly dollaramount a family of three at 150% of the federalpoverty line is required to contribute toward thecost of child care. The average monthly copay-ment was $56; Oakland and San Jose, CA, haveno required copayment compared with $118 inNorfolk.

Reimbursement rate measures the monthlyprovider reimbursement rate for the youngestage group designation which generally refers tochildren aged 0 to 2 years. The average monthlyreimbursement rate was $720. The lowest rateof $383 is in Nashville compared with $1,094 inMilwaukee. As previously discussed, the TANFand CCDF funding streams are connected viathe TANF transfer allowances and also via themore indirect route of whether or not a statedecides to give child care subsidy priority towomen with a history of TANF receipt. Statepolicy may require that TANF recipients receivepriority for child care subsidies over other low-income working families. Subsidy commitment

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320 L. P. Jordan

is a binary indicator that measures the state regu-lation about priority subsidy populations, where“1” denotes priority given to women with historyof TANF receipt.

TANF Policy Data

Six measures of TANF were included becauseof the potential impact on and/or interactionwith other measures of the child care sub-sidy system. Five of these measures, Time Lim-its, Diversion, Family Cap, Sanctions–Who andSanctions–How Long, captured features of theTANF system that potentially restrict the TANFpopulation. Time Limits captures current regula-tion regarding implementation of TANF lifetimetime limits; approximately one half of the sam-ple cities have implemented time limits shorterthan the federal maximum of 60 months. Di-version is a binary indicator of whether or nota state has a formal TANF diversion program;slightly less than one half of the sample hada diversion program in place. Family Cap is ameasure of the extension of TANF benefits toany new children born to a current TANF re-cipient. The rules include a partial and full cap.The majority of the cities had some type of fam-ily cap in place; 10 had a full family cap, 2had partial, and the remaining 8 had no fam-ily cap in place. Sanctions–Who is a measure ofwhether the TANF program sanctions only theadult or the full family for noncompliance; a lit-tle more than one half of the cities sanction thefull family. Sanctions–How Long measures thesanction duration in months (the maximum valueof 99 is a permanent sanction). The most com-mon sanction duration was 6 months (9 cities),with 7 cities less than 6 months, 1 for 36 months,and 3 with permanent sanctions in place. Finally,a measure of the maximum monthly dollars ofTANF benefit for a family of three is included.The average maximum TANF benefit was $399with a low of $185 in Nashville and a high of$699 in San Jose.

Analysis

Descriptive and multivariate techniques wereused to investigate the interactive relationshipamong multiple indicators of the child care sub-sidy system and to address the key research ques-

tions. First, all of the pairwise correlations forchild care subsidy and TANF indicators wereexamined to determine if a more complex multi-variate solution is warranted. Based on the find-ings of the pairwise correlations, cluster analytictechniques were then conducted to capture themultidimensional relationship between the vari-ables.

Cluster analysis creates groups ofsubject–objects (cities in this instance)based on similarities of variable–objects (childcare and TANF welfare policy indicators inthis instance). These classification techniquesdifferentiate previously undifferentiated groupsas compared with discriminant analysis that iscommonly used to identify a subset of variablesthat is capable of distinguishing previouslydifferentiated groups (Gore, 2000). The twomost frequently recommended clusteringalgorithms are the average linkage methodand Ward’s method (Breckenridge, 2000;Galbraith & Jiaqing, 1999; Gore; Lorr, 1994).These are hierarchical linkage (or sequentialagglomerative hierarchical) methods wherethe procedure begins with the assumption thateach subject (city in this study) is an individualcluster, and at each successive iteration, newclusters are formed. The average linkage methodjoins elements based on the average degree ofsimilarity between the element and the existingmembers of the cluster, while Ward’s methodjoins elements based on the smallest increase inthe sum of squared distances of each object fromthe mean value of the cluster. Prior literaturesuggested comparison of cluster solutions fromaverage linkage and Ward’s methods as oneway of validating cluster solutions. If the twoprocedures result in similar solutions, the clustersolution is considered less likely an artifactof the methods and algorithms used and morelikely representing underlying latent constructs(Gore). Both of these methods were used in thefollowing analysis.

RESULTS

Correlation Coefficients

Pairwise correlations were examined to ex-plore the relationship between individual pairs

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TABLE 3. Correlation Coefficients Across Different Policy Characteristics

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

(1) Subsidy Application(2) Subsidy Eligibility –.21(3) Income Eligibility .19 .57∗∗(4) Eligibility Duration –.27 .11 .08(5) Waiting List .40 .18 .48∗ .42(6) Subsidy Commitment –.07 .06 .28 –.12 .10(7) Parent Copayment .35 –.22 –.09 –.44 .21 .08(8) Monthly Reimbursement Rate –.42 .36 .28 .16 –.12 –.01 –.20(9) Time Limits .35 –.26 .05 –.24 .38 .25 .62∗∗ –.06(10) Diversion .14 –.18 –.21 –.29 .03 .10 .64∗∗ –.16 .33(11) Family Cap –.44 .19 .14 .18 .08 .42 .01 .47∗ .28 –.20(12) Sanctions– Who –.55∗ .06 –.21 –.17 –.24 .30 .24 –.06 .01 .21 .42(13) Sanctions–How Long .05 .26 .00 –.26 –.32 –.38 –.07 .22 –.27 –.12 –.16 –.26(14) Maximum Benefit –.43 .48∗ .26 .48∗ –.12 –.20 –.55∗ .70∗∗∗ –.60∗∗ –.43 .29 –.01 .22

∗p < .05. ∗∗p < .01. ∗∗∗p < .001.

of measures and address the first research ques-tion.

Within the child care policy variables, therewere a total of 28 possible correlations. Approx-imately one quarter of them (8) were moder-ately to strongly correlated and suggested sometype of latent (underlying) relationship. How-ever of these 8 correlations, only 2 were statis-tically significant. Income Eligibility was pos-itively correlated with Subsidy Eligibility andWaiting List (see Table 3 for coefficient cor-relations). The correlation between waiting listand eligibility rules may reflect states’ effortsto ration limited subsidy funds. States may setlow income eligibility thresholds to limit the po-tentially eligible population and thereby avoiddemand in excess of resources and the needto place families on a waiting list. Alternately,states may set higher thresholds that extend el-igibility to a larger population and manage theexcess demand by placing families on waitinglists. Within the TANF variables, there were 15possible correlations. Only 1 of these correla-tions was statistically significant; Time Limitswas strongly negatively correlated with Maxi-mum TANF Benefit (r = –0.60, p < .01), indicat-ing that longer time limits were more likely tobe observed in localities with lower maximumTANF benefits. This suggests that TANF dol-lars may be used to provide lower overall cashbenefits for a longer stretch of time, once again

illustrating how different policy levers operate intandem.

Across all of the child care and TANF policyvariables, there were 91 possible correlations.Less than one tenth (8) of these correlations werestatistically significant. The measure of generalwelfare generosity, Maximum TANF Benefit, wasmoderately to strongly correlated with four dif-ferent child care variables. It was positively cor-related with Income Eligibility, Eligibility Dura-tion, and Monthly Reimbursement Rate and wasnegatively correlated with Parent Copayment.Additionally, Parent Copayment was stronglypositively correlated with two other TANF vari-ables, Time Limits and Diversion. There are alsosignificant positive correlations between Sub-sidy Application and Sanction–Who as well asProvider Reimbursement Rates and Family Cap.

The findings from pairwise correlations givesome indication of how different policy fea-tures operate in the policy environment. For ex-ample, the positive correlations between Max-imum TANF Benefit with Income Eligibilityand Monthly Reimbursement Rate suggest thathigher levels of cash welfare generosity were re-lated to more inclusive income eligibility criteriaand more generous compensation to the providercommunity, hinting that child care policy strate-gies may mirror other measures of social welfareprogram generosity. While of substantive inter-est on its own, the relatively small proportion of

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significant pairwise correlations (1 in 10), withinand across the two policy areas, does not providestrong support for correlation across the childcare policy characteristics and across the TANFand CCDF programs.

Cluster Analysis

Taking into account multiple policy levers, thecluster analysis provides evidence of coherentgroupings of cities across the sample support-ing the second research question. The variationacross the TANF welfare and child care policydimensions resulted in a four-cluster solution.The use of two different hierarchical linkagemethods, Average Linkage and Ward’s Method,resulted in the same cluster assignment provid-ing strong support that these findings representstable clusters following Gore (2000). The clus-ter averages of the Ward’s Method cluster solu-tion are presented in Table 4 (complete results ofthe average linkage analysis are available uponrequest from the author).

The four clusters are labeled Conservative,Limited, Average, and Universal based on inter-pretation of each cluster’s average score acrossthe individual policy indicators compared withthe overall city average scores. Figure 1 displaysthe interpretative guide for the cluster solution.

In general, members of the Conservative clus-ter (Corpus Christi, Austin, and San Antonio,TX, and Nashville, TN) restricted cash bene-fits in the TANF program and provided mini-mal support to working-poor families throughthe child care subsidy system. They had lower-than-average TANF benefits and reimbursementrates for child care subsidy providers combinedwith higher-than-average parent copayments forchild care subsidies. Conservative cluster mem-bers were the most likely to have waiting lists forchild care subsidies and required more frequenteligibility determination. While they were morelikely to have multiple sites for subsidy applica-tion, they were more likely to have fewer sitesfor ongoing eligibility determination also sug-gesting increased transaction costs overtime forsubsidy recipients. They had average income el-igibility limits for subsidy determination. Therewas not a clear preference given to former TANFmembers by members of this cluster. TANF timelimits are more likely to be shorter than the maxi-mum allowed by the federal government, and di-version was used to reduce TANF entry. Familycaps and sanctions were used less in this regime.Cities in this group appeared to emphasize per-sonal responsibility over government assistanceand expected welfare and subsidy clients to carrythe bulk of the financial burden and also to payhigher nonmonetary transactions costs.

TABLE 4. Averages by Policy Measures and Cluster

Conservative Limited Balanced Universal All Cities

Child Care PolicySubsidy Application 2.75 1.00 1.25 1.40 1.55Subsidy Eligibility 1.25 2.33 2.00 2.60 2.05Income Eligibility 0.60 0.66 0.56 0.70 0.62Eligibility Duration 6.00 6.00 7.50 9.60 7.50Waiting List 1.00 0.67 0.38 0.80 0.65Subsidy Commitment 0.50 1.00 0.38 0.40 0.50Parent Copayment 85.75 81.00 48.00 31.20 56.30Monthly Reimbursement Rate 493.82 863.25 621.65 972.18 719.77

TANF PolicyTime Limits 1.00 1.00 0.56 0.60 0.73Diversion 0.75 0.67 0.38 0.20 0.45Family Cap 0.25 1.00 0.38 0.80 0.55Sanctions–Who 0.63 0.83 0.88 0.70 0.78Sanctions–How Long 5.25 16.00 26.88 23.50 20.08Maximum Benefit 187.25 290.00 389.88 631.80 394.85

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Child Care Policy Strategies in the United States 323

FIGURE 1. Cluster Analysis Results

The Limited cluster (Norfolk and Rich-mond, VA, and Indianapolis, IN) focused ondiverting clients from TANF programs andproviding child care support to former TANFrecipients. Members of this cluster hadhigher-than-average parent copayments andhigher-than-average provider reimbursementrates. They had fewer available sites for subsidyapplication and shorter eligibility periods andan average number of sites available for subsidyeligibility determination, income eligibilitydetermination limits, and use of waiting lists.Members of this cluster utilize most of the toolsavailable to restrict and reduce welfare partici-pation such as full family caps and shorter timelimits. This suggests that there may be a largerpopulation of those with a history of TANFinvolvement in the potential subsidy population,while the diversion program that operates to dis-courage entry to the TANF system could increasethe share of clients with similar characteristics.

Members of the Limited cluster expected parentsto meet an increasing portion of the child carecosts as their income rose and as they moved outof the TANF system, possibly reflecting a com-mitment to progressive personal responsibility.Members of the Limited cluster also offeredmore generous provider reimbursement rates.This may reflect a policy commitment to providea higher quality of care, with a focus on the childdevelopment aspects of early care comparedwith employment support aspects of care thatare the focus of this study, or alternatively, itcould reflect high costs of care in the region.

The Average cluster (Jacksonville, FL;Newark, NJ; Toledo, OH; Chicago, IL; Pitts-burgh and Philadelphia, PA; Baltimore, MD; andDetroit, MI) focused on giving some benefits toclients across both the TANF and child care sys-tems. Members of this cluster had average levelsacross the majority of the variables with the fol-lowing exceptions: They had lower-than-average

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income eligibility limits, provider reimburse-ment rates and parent copayments; they wereless likely to have waiting lists; and they hadinstituted TANF time limits shorter than the fed-eral maximum. It appears that there was an at-tempt to balance the cost burden between clientsand government by the average cluster members.For example, lower parent copayments makesubsidy participation less of a financial burdenfor parents. Lower income eligibility limits sug-gest a less inclusive potential subsidy popula-tion, but the decreased likelihood of having awaiting list suggests that members of this clus-ter are meeting the subsidy demand as basedon their income eligibility criteria. This pointstoward a strategy where policy levers are act-ing in concert rather than conflict. Thus, eventhough the total package of benefits may not ap-pear particularly generous, it reflects a strategyto offer limited benefits to indigent and work-ing poor and utilized a cost-sharing approachbetween state and citizen to spread out scarceresources.

The Universal cluster (Milwaukee, WI; NewYork City, NY; San Jose & Oakland, CA; andBoston, MA) reflected a commitment to pro-vide government assistance to members of boththe poor and working-poor populations. Mem-bers of this cluster had lower-than-average par-ent copayments and higher provider reimburse-ment rates. They had an average number of sitesavailable for subsidy application, longer eligibil-ity periods, and a higher number of sites avail-able for eligibility determination. There was nota clear preference for new subsidies given toclients with or without a history of TANF in-volvement. Waiting lists were, however, morelikely to be present in this policy strategy, pos-sibly reflecting a rationing mechanism withinsystems that have generous policies. Membersof this cluster utilized an average amount ofthe available tools for restricting welfare par-ticipation (time limits and sanctions). On theother hand, and somewhat counterintuitively,they were more likely to have family cap restric-tions. The combination of higher social welfarebenefits (in dollars) offered to more participants,and on the whole, less punitive measures to re-strict welfare participation suggest a more uni-versal approach of policy.

The results from the cluster analysis sug-gested four types of child care policy strate-gies that are created through the configurationof multiple policy levers. How did the differ-ent clusters compare to one another on some ofthe key measures? The average Provider Reim-bursement Rate for the Universal cluster was2 times the amount for the Conservative clus-ter, while the Parent Copayment was almost onethird less. These are dramatically different pol-icy strategies that can have a significant impacton issues of equity regarding the types of op-tions available for indigent and working poorand women. Additionally, although the Conser-vative cluster had the highest average SubsidyApplication score across the clusters suggestingdecreased transaction costs for initial applica-tions, they also had the lowest Subsidy Eligi-bility score and were tied for the lowest Eli-gibility Duration score suggesting the presenceof increased transactions costs for those parentswho are already subsidized. The combination ofgrowth in government child care programs anddevolution of cash welfare programs to the statelevel are two factors that have encouraged thedesign of varied policy strategies. The resultsfrom the four-cluster solution illustrate substan-tially different policy environments, with variedemphasis on state and individual responsibilitytoward shouldering the costs of child rearing andlabor market participation.

DISCUSSION

The current study used a policy regime ap-proach to identify child care policy strategiesand capitalized on variation in a sample of U.S.states. Fourteen different measures of child careand TANF policies were examined to explorewhat different configurations of these leverssuggest about the overall policy strategy tosupport employment for economically disadvan-taged families. Through the use of two differ-ent clustering techniques, four distinct solutionsemerged and were labeled Conservative, Lim-ited, Average, and Universal. Each of these clus-ters illustrated a policy environment that placesdifferential emphasis on who bears the costs of

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combining child rearing and labor market em-ployment.

Members of the Conservative cluster weremost likely to restrict cash TANF benefitsand also provided minimal support to low-income working families. This cluster supportedminimal government intervention for indigentand low-income families and expected familiesto bear the costs of market and family. On theother hand, the members of the Universal clusterwere most likely to offer government assistanceacross both the child care subsidy and TANFsystems, suggesting a policy strategy that ac-knowledges a role for government in helpingeconomically disadvantaged families to balancemarket and family activities. Members of theLimited cluster focused on diverting clients fromentering the TANF system and were more likelyto provide subsidies to women with a historyof TANF receipt, suggesting that subsidies maybe harder to obtain over time in these cities.The Limited cluster also had a fairly high par-ent copayment and low income eligibility limits.Overall, the policy strategy of the Limited clus-ter suggests a commitment to provide assistanceto only the neediest. By distributing the costsbetween clients and government, cities in theAverage cluster may be able to provide smallersubsidies to more eligible women. Members ofthe Average cluster were not particularly gener-ous in the level of subsidies or the inclusivenessof their income eligibility limits. However, theyalso were less likely to have waiting lists, sug-gesting a balanced approach where a numberof policy levers reflect a single emphasis, ratherthan reflect competing goals.

What do these clusters suggest about howsubsidy delivery systems are related to receiv-

ing help with child care expenses? Table 5 dis-plays the aggregate rates of subsidy receipt forthe Fragile Families sample tabulated by cluster,and at first glance, the rates appear quite similaracross the four clusters.

The first column in Table 5 presents the over-all rate of ever-received TANF for the samplepopulation within each cluster. The overall ratewas quite high and reflected the characteris-tics of the population (range is from 41% to50%). Past involvement with TANF was asso-ciated with higher rates of subsidy receipt re-gardless of geographic residence. Based on thissample, women with a history of TANF wereat least 2 times as likely to have a child caresubsidy compared with the women without ahistory of TANF, providing evidence that it isthe relatively more disadvantaged women whohave greatest access to subsidized care. The moststriking comparison in rates of subsidy receiptbetween TANF and non-TANF populations wasobserved within the Conservative and Universalclusters where receipt among those with a his-tory of TANF was approximately 3 times as highas those without. These two clusters both havethe highest overall rate of subsidy receipt for theTANF population (both are 17%) and similarrates of TANF receipt (42% and 41%, respec-tively). It is interesting that the rates of subsidyreceipt were so similar for these two clusters,perhaps reflecting individual-level characteris-tics that result in higher levels of involvementwith TANF, or perhaps even differences in par-ity across the sample, because women with olderchildren are more likely to have other children incare, which is one of the factors that influencesthe likelihood of observing subsidy receipt (Blau& Tekin, 2007).

TABLE 5. Subsidy Rates by Cluster for Mothers With and Without History of TANF

Subsidy receipt

Ever Received TANF (for sample) All Mothers History of TANF No History of TANF

Conservative 42% 11% 17% 6%Limited 50% 11% 14% 7%Average 42% 9% 14% 5%Universal 41% 10% 17% 5%Overall Average 43% 10% 16% 6%

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Within the TANF history subsidy subsample(Column 3), there were noticeable differencesin the rates between the clusters. The Limitedand Average clusters both had a 14% subsidyrate compared with 17% of the other two, sug-gesting possible differences in policy priorities.The Limited cluster had the highest rate of non-TANF-related subsidy receipt combined with thehighest overall rate of women who have ever re-ceived TANF, suggesting that welfare strictnessmay negatively influence the availability of em-ployment supports for those with a history ofTANF in these areas. This may reflect an in-direct strategy to ration scarce resources. Thehighest rates of subsidy receipt among thosewithout TANF history were for the Conserva-tive and Limited clusters (6% and 7%) comparedwith the Average and Universal clusters (both are5%), which again, may be related to the sampledemographics. One possible explanation for thisis that those regimes that place the cost burdenon individuals such as Limited and Conservativemay have expanded their less-stigmatized socialwelfare programs, which could lead to a crowd-ing out of less-advantaged women with a historyof welfare receipt.

CONCLUDING COMMENTS ANDPOLICY RECOMMENDATIONS

An historical view of U.S. child care policyillustrates competing and shifting ideals of wom-anhood for indigent mothers, starting from theearly influences of the maternalist movement tothe current prevailing market-based solutions.U.S. child care policies reflect underlying, andcontested, conflicts between gender and state re-sponsibility for reconciling caregiving with fullparticipation in market employment. These en-during contestations have produced policies thatare at times incomplete, locally varying, and inthe end, of questionable effectiveness. This un-resolved conflict is reflected in the patchwork ofpolicy levers in child care strategies such as thecreation of subsidy programs without fully fund-ing them and the use of high parent copaymentscombined with low-income eligibility limits.

Within a context of insufficient funding andlocal-level policy discretion, state actors use var-

ious strategies to manage scarce resources, re-sulting in both regional variation and sometimescontradictory or offsetting policies. This varia-tion in policy strategies has consequences forthe likelihood that a mother will be able to re-ceive a child care subsidy, which is arguably anessential employment support for the economi-cally disadvantaged. Economically advantagedwomen are also struggling to fulfill competingdemands of market and family in the UnitedStates (Stone & Lovejoy, 2004) and other Or-ganization for Economic Cooperation and De-velopment (OECD) countries, with more liberalfamily policies (Lewis, Knijn, Martin, & Ostner,2008; Stone & Lovejoy) suggesting that merelyleveling the financial costs of nonparental al-ternative caregiving arrangements is, in itself,an incomplete solution. Acknowledging the uni-versality of reconciling market employment andfamily commitments for all mothers and, indeed,all families is an important component of un-derstanding how, and even why, there is such alack of a full policy commitment to supportinglow-income parental employment in the UnitedStates.

Future research could inform a more univer-sal focus on how mothers across all socioeco-nomic groups successfully combine productiveand reproductive activities and should considerthe distribution of subsidy receipt and child carepolicy regimes by a sample more representa-tive of the general population of new parents,such as the Early Childhood Longitudinal Study(ECLS)–Birth Cohort. A further advantage of ageneral population sample would be the poten-tially better match between state populations andstate policy indicators. Although Johnson, Mar-tin, and Brooks-Gunn (2011) have recently usedthe ECLS to examine subsidy receipt use amongpotentially eligible populations, their study fo-cused on the characteristics of the recipients anddoes not consider explicitly how the policy en-vironment influences the possibility of subsidyreceipt. The conclusions drawn are quite similarto the conclusions here—that a complex subsidysystem may be contributing to low participationamong disadvantaged subpopulations.

An important part of the rationale for de-volved policy discretion is that local govern-ment is best able to design and implement

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effective policy solutions to issues of local pub-lic concern. However, decentralized policy pro-grams can obfuscate larger issues such as thoserelated to gender equity. It is true that localgovernments—states, counties, cities—have acrucial role to play in developing successfulstrategies to support employment for econom-ically disadvantaged families, but this role doesnot relieve the federal government from a re-sponsibility to promote standards of equity. Pol-icy design and implementation could be concep-tualized alternatively as a partnership betweendifferent levels of government. Local levels ofgovernment are probably better suited to designand implement a social program such as childcare subsidies. However, the federal governmentcan play a critical role in setting standards topromote gender equity in the reconciliation ofmarket–family–state relations. Universal socialprograms tend to promote more equitable pol-icy solutions, in part by expanding the targetpopulation to include a larger and more diversegroup. It is not merely the diversity and size ofthe target population of universal programs thatadd to the force behind it, but also the inclu-sion of people who are more advantaged withthose who are less advantaged across a range ofdifferent status characteristics. These concernsof equity and inclusion are of central concernto social welfare practitioners and scholars. Oneway to promote greater universality in alterna-tives to nonparental caregiving is to encouragethe redefinition of this issue as universal to par-ticipation in a market-based society where thereare children. As long as mothers are penalized inthe marketplace while fathers are rewarded (Cor-rell, Benard, & Paik, 2007), there will continueto exist a less-than-full commitment to supportfamily–market relations and the absence of com-mitment to reduce underlying gender inequities.There is a need to develop a well-defined, artic-ulated, and implemented national-level policy tosupport devolved local authorities in the designand implementation of best practices at the lo-cal level as suggested by the OECD (2006) and,more recently, by Palley and Shdaimah (2011).The findings from the current research study pro-vide information for policymakers about howcomplex combinations of policy levers work inconflict and concert. Pursuing a national child

care policy strategy will enable citizens fromall socioeconomic backgrounds to truly makethe best choices for the care and education ofchildren and the employment of parents. Socialworkers can play a crucial role in advocating formore universal coverage to help economicallydisadvantaged families meet the twin goals ofreproductive and productive labor.

ACKNOWLEDGEMENTS

This work was supported in part by a disserta-tion grant from the U.S. Administration for Chil-dren and Families, Child Care Bureau, ResearchScholar Grant #90YE0061, and the Universityof Washington School of Social Work.

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.APPENDIX: DATA SOURCES

Child Care Policy Description Coding Source

Subsidy Application What are the applicationmethods?

1 = in person only; 2 = inperson + one other; 3 = inperson, by mail, phone, orother means

Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Subsidy Eligibility Where is eligibilitydetermined?

1 = voucher management orother; 2 = leadagency/state or countyoffice; 3 = lead agency andvoucher management orother

Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Income Eligibility Percent of State MedianIncome

Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Eligibility Duration How long is the eligibilityperiod?

Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Waiting List Is there a waiting list? 0 = no; 1 = yes Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Subsidy Commitment Is priority given to TANFclients?

0 = no priority client; 1 =priority for TANF history

Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Parent Copayment Dollars per month Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

MonthlyReimbursement Rate

Dollars per month Child Care and DevelopmentBlock Grant Report of StatePlans for the Period10/01/97 to 9/30/99

Time Limits Time limit requirements 0.5 = 60 months; 1 = lessthan 60 months

Health and HumanServices/Office of theAssistant Secretary forPlanning and EvaluationState Implementation ofMajor Changes to WelfarePolicies, 1992–1998, Tablew-1

Diversion One-time payment to divertenrollment

0 = no; 1 = yes Urban Institute, Welfare RulesDatabook, database query

Family Cap Family cap on new births 0 = none; 0.5 = partial; 1 =full

Health and HumanServices/Office of theAssistant Secretary forPlanning and EvaluationState Implementation ofMajor Changes to WelfarePolicies, 1992–1998, Tablew-5

Sanctions–Who Who does the TANF programsanction?

0 = none; 0.5 = adult portiononly; 1 = full family

Urban Institute, Welfare RulesDatabook, Table 17

Sanctions–How long? Duration of TANF sanction Number of months 99 =permanent

Urban Institute, Welfare RulesDatabook, Table 17

Maximum Benefit Maximum TANF benefit for afamily of three

Monthly dollars Green Book, 2000, Table 7–10

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