The Use of Child Care Subsidies in Wisconsin

Steven Cook, University of Wisconsin at Madison

An important component of welfare reform nationwide has been an increase in the funding available for child care subsidies for low-income families, with the goal of reducing the constraints on employment posed by the difficulty of arranging care for children while parents are working. Even with this increased availability, the take-up rate for child care benefits appear quite low with less than half of apparently-eligible parents receiving subsidies. This paper uses administrative records for 16000 single-mother TANF recipients in Wisconsin to estimate the effect of household socioeconomic and demographic characteristics on the likelihood of receipt and the effect of subsidy receipt on subsequent employment. A survey of 2500 of these TANF recipients will allow consideration of additional characteristics not provided in the administrative record, and will provide information on the nature and cost of the actual child care arrangements used.