The blog of the Urban Institute
February 26, 2021

Child Care Subsidies Can Provide Critical Support to Families during Unemployment

February 26, 2021

The effects of the COVID-19 recession have been felt throughout the economy, but families with lower incomes are more likely to have experienced a job loss. Though the economy is regaining some jobs lost during the earliest days of the pandemic, workers with lower wages are less likely to have returned to their previous job or obtained a new job. When a parent loses a job, keeping a child in their child care setting gives a family stability while they look for a new job or enroll in a workforce development program. Attending a job training or education program can help parents gain new skills or provide experience that improves parents’ employment opportunities.

The Child Care and Development Fund (CCDF) is one possible source of support for parents.  CCDF is a federal block grant program that provides funds to states to help families with lower incomes pay for child care. Parents must meet federal eligibility requirements to participate (for example, they must be participating in an approved activity like working or attending school in order to enroll their child). For families already receiving subsidies, states and territories must continue to provide care during temporary breaks in activities. CCDF also includes provisions to ensure families can maintain continuous child care during periods of change—such as the COVID-19 pandemic.

Within federal guidelines, states and territories can determine their own eligibility policies and define eligible activities to fit families’ needs. They might expand the types of education and training that make a family eligible or allow families to enter the program or continue receiving subsidies while they search for jobs.

We’ve been tracking and updating states’ and territories’ CCDF policies since before the pandemic in the CCDF Policies Database, which serves as a single, go-to resource for policymakers seeking to understand variations across the country. Though the policies we’ve highlighted below were in effect on October 1, 2019, they illustrate the varying degrees to which states and territories allowed families to receive subsidies while looking for a job or attending an education or training program before the COVID-19 pandemic. We will continue to track these policies and changes made in response to the COVID-19 pandemic so policymakers and researchers can analyze how states and territories adapted to support families during this time of high unemployment and evaluate how these changes affect families.

Which states allow families to receive CCDF subsidies while a parent searches for a job?

In 2019, in most states and territories, families could receive a subsidy if the parent searched for a job at some point during their eligibility period, which typically lasted 12 months. Most states required the family to already be receiving a subsidy before the parent’s activity ended. This meant a child could continue to attend their child care provider while the parent looked for a new job, ensuring continuity of care for the child.

Some states and territories also allowed parents to initially apply for and receive a subsidy while looking for a job. The maximum amount of time parents could receive subsidized child care while looking for a job varied across states and territories.

Map showing states and territories in which parents seeking jobs could receive subsidized child care from the Child Care and Development Fund in 2019

As of October 1, 2019, 32 states and territories allowed parents to search for a job if their original activity ended during the eligibility period, and 19 states and territories also let parents initially apply for and receive a subsidy while looking for a job. Only 5 states and territories did not allow for job search at any point in the eligibility period.

Which states allow parents to receive CCDF subsidies for going to school?

As of October 1, 2019, all states, territories, and the District of Columbia allowed parents to receive child care subsidies while they were working, but states and territories varied in their approval of education and training programs. If a parent decided that attending an education program was the best option to help them prepare for a future job, some states and territories allowed them to receive a CCDF subsidy for education or training without any restrictions or employment requirements. Other states imposed additional requirements on parents enrolled in education programs, such as working a minimum number of hours per week in addition to attending classes or restricting enrollment to programs directly linked to an employment opportunity.

Unit chart showing they types of education and training activities considered eligible for CCDF subsidies in 2019

As of October 1, 2019, 54 states and territories considered parents potentially eligible for CCDF while they attended high school, 52 states and territories allowed parents to attend a GED or high school equivalency program, 45 states and territories counted post-secondary education as an eligible activity for CCDF, 31 states and territories allowed parents to enroll in English as a Second Language (ESL) courses, 49 states and territories approved training programs, and 36 states and territories allowed parents to attend an adult basic education program.

Tracking CCDF policies can help policymakers understand families’ needs during a crisis

Providing child care subsidies to parents attending school or job training programs and to parents looking for work can help support families during periods of unemployment and child care instability, like the one brought on by the COVID-19 pandemic. As states and territories adapt these and other policies to meet the evolving needs of families during and after the pandemic, the CCDF Policies Database can be a resource for researchers interested in analyzing how these policies vary across different states and territories over time and help inform future policy decisions when policymakers respond to changing circumstances.

Youngsters in a preschool class wear vests and masks and hold on to a strap as they take a walk outdoors on Arlington Street escorted by adult childcare providers in Boston, Massachusetts, on September 18, 2020. (Photo by John Tlumacki / The Boston Globe via Getty Images)

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