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Witte, Ann Dryden
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Working Papers / Wellesley College, Department of Economics 2001,04
We provide descriptive evidence from Miami-Dade County (MDC) in FL and from five representative areas in Massachusetts (MA) that government policies governing welfare reform, the child-care subsidy system, and minimum-standards regulations have had considerable influence on the availability, price, and quality of infant and toddler care as welfare reform progressed from 1996 to 2000. We suspect that the markedly different proportion of the population that is native born and differences in income and education in MDC and MA also have had an influence on the very different situations for infant and toddler care in MDC and MA. Our data suggest that minimum regulations for the care of infants and toddlers, market prices, and provider reimbursements in MDC are not in synchrony. For example, we estimate that, during the period of our study, a center-based provider would have to charge approximately $129 per week to cover the costs of providing full-time infant care that is in compliance with state-imposed minimum caregiver-to-child ratio requirements. We find that the vast majority of center providers in MDC charged less than $100 per week for infant care. In addition, the publicly set reimbursements paid to centers in MDC for providing full-time infant care never exceeded $95 per week during the period of the study. This suggests that, in order to be in compliance with the state-promulgated standards, infant care in MDC must be subsidized by sources other than the prices paid by parents or the State for the care of their infants. This is different from the situation we observe in Massachusetts, where prices, reimbursements, and regulations are more closely aligned. We find that prices of infant and toddler care in MDC are strikingly lower than in MA, even after adjusting for the higher cost of living and the more stringent regulatory environment in MA. We suspect, and provide some evidence, that this marked difference reflects, at least in part, lower average quality of infant and toddler care in MDC. We find that Florida?s welfare reform, with its requirement that cash assistance recipients be active when their youngest child is three-months-old and with stringent time limits for the receipt of cash assistance, is associated with a large increase in the number of infants and toddlers from low-income families in formal care. In contrast, Massachusetts? welfare reform, which imposes neither time limits nor activity requirements on cash assistance recipients with children under the age of two, is associated with only a moderate increase in the numbers of infants and toddlers from low-income families in care. For example, during our study period the number of infants in care increased by 150% in MDC and by only 10% in Massachusetts. During the period surrounding welfare reform, enrollments at facilities offering infant and toddler care in MDC increased if they accepted child-care subsidies and declined if they did not. Altogether, the growth in the full-time enrollment of infants and toddlers at subsidized facilities has been far less dramatic than the increase in the number of subsidies issued for infant and toddler care. This suggests that there may have been a displacement of private-pay infants and toddlers by those with child-care subsidies. During the period of our study, displacement by those with subsidies is more likely because payments to providers accepting vouchers exceeded the median prices charged by providers that did not participate in the child-care subsidy program. We find that the formal care of infants and toddlers in MDC, as compared to MA, is much more likely to take place at child care centers and much less likely to take place at family child care homes. We suspect that the more pronounced racial and ethnic diversity, higher poverty levels, and a much larger unlicensed, family child care underground economy in MDC have had considerable influence. We present evidence of some deterioration in the quality of infant and toddler care purchased with child-care subsidies in MDC during the course of welfare reform. Specifically, we observe an increase in the proportion of staff with less than a high school education at subsidized centers offering infant and toddler care. In addition, observational assessments of the quality of infant and toddler programs at subsidized centers in MDC indicate that the proportion of low-quality infant and toddler programs has approximately doubled (from 5% of programs in 1996 to 11% of programs in 1999) during the course of welfare reform. This is a worrisome development, given the large numbers of low-income infants and toddlers in formal child care in MDC. The level of accreditation of centers with infant and toddler programs in MDC (1 ? % of subsidized and 3% of unsubsidized facilities during the period of our study) is distressingly low. By way of contrast, over 30% of centers with infant and toddler programs that take vouchers in MA are accredited and between 20% and 25 % of those that do not take vouchers also are accredited. The low level of accreditation in MDC exists despite the fact that, under FL?s Gold Seal program, subsidized providers can receive up to a 20% increase in reimbursements if they become accredited.
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