Child Care Subsidies, Low-Wage Work and Economic Development

By Davis, Elizabeth E.; Jefferys, Marcie | International Journal of Economic Development, July 2007 | Go to article overview

Child Care Subsidies, Low-Wage Work and Economic Development


Davis, Elizabeth E., Jefferys, Marcie, International Journal of Economic Development


Abstract

Public spending for work supports like child care subsidies has been greatly increased in recent years to "make work pay' and to encourage the labor force participation of low-income parents. This study tracked changes in earnings and employment sectors over three years for parents receiving child care subsidies in Minnesota. Employment of these parents was more concentrated in a few sectors of the economy than for the workforce as a whole. The overall pattern of concentration of employment did not change over the three years, but parents who moved into or stayed in the health care sector received higher average wages and experienced greater wage growth. Given the importance of the health care sector for community development and projected future shortages of healthcare workers, opportunities for linking work supports like child care subsidies with training and employment in these fields could improve outcomes for both families and communities.

Introduction

Public spending for work supports like child care subsidies has been greatly increased in recent years to "make work pay,' reinforced welfare legislative changes passed in 1996. "Work supports" are government programs intended to provide additional resources to working families with low incomes, and they include federal and state earned income tax credits, food stamps and child care subsidies. Over a ten year period, spending on work supports for low income families grew from $13 billion (in 2000 dollars) to over $70 billion (Haveman, 2003). A key public policy goal of these programs is to support low-income families who are working and who might otherwise apply for or return to cash assistance (welfare) programs such as Temporary Assistance for Needy Families (TANF).

This study focuses on low-income families who participate in the child care subsidy program. Recent research has demonstrated the effectiveness of child care subsidies in increasing the work effort of low-income parents (see for example, Blau and Tekin, 2001 and Tekin, 2004). The cost of child care is often high relative to workers' wages (Chase and Shelton, 2000), and public subsidies to help make child care affordable to families may increase the labor force participation of parents. Further, the expectation of many policy makers is that encouraging low income parents' employment will increase their work experience and will lead to promotions or better jobs, and, eventually, financial self-sufficiency. However, there is growing recognition in the welfare to work literature that the nature of the jobs many former welfare recipients obtain is unlikely to lift them substantially out of poverty in either the near or long term (Acs & Loprest, 2004, Loprest 1999, Burtless, 1995).

Affordable, quality child care plays an important role in enabling parents to work in the paid labor force. However, the role of child care in the economy extends beyond parents' workforce decisions. Recent studies have emphasized child care's "multi-faceted role" in the economy, including its linkages to local economic development. Increasingly, child care is recognized as an important economic sector in addition to its crucial role in the education and development of future workers (Warner, 2006, Warner & Liu 2005). For example, Ribeiro and Warner (2004) identify over three dozen studies completed or in progress that measure the importance of the child care sector to the local economy in specific states and local communities.

Economic development policies have traditionally focused on job creation in sectors with customers outside the local area (export-led growth). In contrast, Pratt and Kay (2006) describe the recent shift in economic development thinking to focus on the role of service sectors (including child care) as generators of local economic growth. At the same time, welfare policy has typically focused on getting parents off the welfare rolls and into jobs.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Child Care Subsidies, Low-Wage Work and Economic Development
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.