WASHINGTON, D.C., February 7, 2003—Forty-eight percent of employed families with children under age 13 pay for child care, according to new research from the Urban Institute's Assessing the New Federalism project. On average, these families spend 9 percent of their earnings on child care.
Twenty-nine percent of employed families with children under 13 receive help paying for child care or receive child care for free. Most of this help comes from relatives, the government, and private organizations, such as YWCAs; few parents report getting help from employers.
Half of low-income (200 percent of the federal poverty line and below) single-parent families and a third of low-income two-parent families report receiving help from at least one of these sources. A quarter of families earning more than 200 percent of the federal poverty line get help with child care.
The report, Getting Help with Child Care Expenses, by Linda Giannarelli, Sarah Adelman, and Stefanie Schmidt, examines how working families with children under age 13 cope with the cost of non-parental child care during non-summer months.
Methodology
The research is based on the Urban Institute's 1999 National Survey of America's Families (NSAF). The report includes national statistics and detailed data on families in Alabama, California, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas, Washington, and Wisconsin. The findings exclude help received from the tax system. The data underestimate the incidence of non-tax help with child care because some families might not know that their child care is subsidized.
What Families Pay for Child Care
Low-income families spend a significantly larger proportion of their earnings on child care (14 percent) than families with earnings above 200 percent of the poverty line (7 percent). Poor families (those at or below the federal poverty line) pay even more: 18 percent of their earnings. The proportions did not change significantly between 1997 and 1999.
"Even with free help from a relative or participation in a subsidized program, child care is a significant burden for low-income working families, probably ranking third in their budgets after shelter and food," notes Urban Institute researcher Linda Giannarelli, co-author of the new study.
Who Provides Help with Child Care
Fourteen percent of surveyed families paid nothing for child care because a relative provided that care for free. It is likely that many more families received some child care for free from a relative but also paid for other child care arrangements.
Twelve percent of families received help from the government or a private organization, with about half of them paying nothing for child care. Only 2 percent of families reported that a nonresident parent helped pay for child care, though some families may use child support to pay for care. Less than 1 percent reported help from an employer. Two percent received assistance from an individual other than a relative or a nonresident parent. Thirty-two percent of working families had no child care expenses because a parent worked only during school hours, the parents worked complementary shifts, or older children cared for themselves after school.
The number of families with child care help from the government or private organizations increased by 9 percent from 1997 to 1999, a period when government resources devoted to child care subsidies increased substantially. Because the number of employed families with children also increased between 1997 and 1999, the proportion of families receiving support from the government or private organizations did not rise.
Low-Income Families and Child Care
Low-income families were much more likely than families with earnings above 200 percent of the poverty line to receive free child care or to get help paying for care from the government or private organizations, usually in the form of full or partial subsidies. Twenty-one percent of all low-income families and 28 percent of low-income single-parent families received this kind of help. Eight percent of all families with incomes above 200 percent of the poverty line obtained help from the government or private organizations.
Low-income families receiving help reported using more hours of child care and more center-based care than similar families that received no financial assistance for that care. Among children under age 5 in low-income families that paid for child care and reported some sort of help, 58 percent were in center-based care compared with 30 percent of their counterparts whose parents paid for child care but did not receive help. The children whose parents received help were also in care for more hours than the children whose families did not receive help (31 hours compared with 26 hours).
Low-income families were more likely to receive all their child care for free from relatives than were higher-income families (16 percent compared with 14 percent). The proportion of low-income families receiving all of their child care for free from relatives increased from 13 percent in 1997 to 16 percent in 1999.
"This year states will be under great pressure to reduce funding for child care," Giannarelli concluded. "Before making these cutbacks, legislators should consider the critical role subsidies play in expanding child care options that help low-income employed families."
Getting Help with Child Care Expenses (Occasional Paper 62), by Urban Institute researchers Linda Giannarelli, Sarah Adelman, and Stefanie Schmidt, is available online at http://www.urban.org/url.cfm?ID=310615 or from the Urban Institute Publications Sales Office at 202-261-5687 or toll-free at 1-877-UIPRESS.
This report is part of ongoing Institute research illuminating child care in America. More can be found at http://urban.org/r/children.cfm. Two recent papers in this series, Child Care Subsidy Policies and Practices: Implications for Child Care Providers (Policy Brief A-57) and Essential but Often Ignored: Child Care Providers in the Subsidy System (Occasional Paper 63), examine how child care subsidy policies and practices affect child care providers' willingness to serve subsidized families.
The Urban Institute is a nonprofit, nonpartisan policy research and education organization that examines the social, economic, and governance problems facing the nation. Assessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states.
Latest Research
Browse by Topic:
Printer-friendly summary
