The child care subsidy system supports both parents’ ability to work and children’s healthy development by helping parents with low incomes pay for child care so they can work or go to school or training.  Yet many questions remain about equity in the subsidy system: To what extent does it consider inequities that Black and Latino families and immigrant families can face because of structural racism? Specifically, do subsidy policies and practices ensure that families facing barriers rooted in structural racism can access child care subsidies? Are these families able use those subsidies to access child care equal to that accessed by other families? Finally, what steps can policymakers take to ensure their subsidy systems are equitable?

Based on a review of the scant literature on this topic and interviews with 28 experts, this report examines these questions. It first details the range of policies and practices that shape whether families can get and keep a subsidy. These include issues such as experiences families may have in dealing with child care subsidy agencies, whether they are likely to know about availability of and eligibility for subsidies, the ease or difficulty of accessing the agency,  whether they are in a priority group to get the limited funds, the ease or difficulty of applying for subsidies and proving eligibility, and how the state authorizes hours they will pay for child care. The report then examines the policies shaping whether the subsidy system helps address inequities in access to quality child care options that meet these families’ needs. These include the fundamental challenge of relying on the private market, decisions about which providers are eligible to get subsidies, what providers have to do to be approved for payment, how much providers are actually paid, and the role of copayments and other fees. In each of these areas, the report includes detailed suggestions for actions states can take to make their subsidy systems more equitable.