Two child care issues have received extensive attention during the reauthorization period: whether states have enough money to pay for care and whether available care is of sufficient quality.

The 1996 reforms created a child care block grant with about $4.5 billion more available for child care over the 1997 to 2002 period than under previous law. In addition, states were allowed to use money from their TANF block grant for child care. Regulating the quality of care was left to states and localities. Although less than half the families leaving TANF for employment use child care funds, states nonetheless have used all the federal and state dollars in the Child Care and Development Block Grant (CCDBG) and have now used about $3 billion of their TANF funds for child care. Thus, states are purchasing much more care than ever.

Despite this increased funding, critics believe that even more federal spending is necessary, especially since families leaving welfare are provided with child care subsidies while similar low-income families that did not go on welfare but are eligible for subsidies often do not receive them. A widely-cited estimate from the Department of Health and Human Services suggests that existing child care block grant funding provides enough money to serve only 12 percent of all eligible low-income children. There is also continued concern about the quality of care and the federal role in promoting better care through federal or state regulation or by providing federal funds that states must use to improve quality. (Source: Brookings Institution.)

Additional Resources on Child/Family Policy

Selected Summary Findings in Brief

NICHD Study of Child Care (National Institute of Child Care and Development):

• The more time children spent in any of a variety of nonmaternal care arrangements across the first 4.5 years of life, the more externalizing problems and conflict with adults they manifested at 54 months of age and in kindergarten, as reported by mothers, caregivers, and teachers.
• Effects remained, for the most part, even when quality, type, and instability of child care were controlled, and when maternal sensitivity and other family background factors were taken into account.
• The magnitude of quantity of care effects were modest and smaller than those of maternal sensitivity and indicators of family socioeconomic status, though typically greater than those of other features of child care, maternal depression, and infant temperament. There was no apparent threshold for quantity effects.
• More time in care not only predicted problem behavior measured on a continuous scale in a dose-response pattern but also predicted at-risk (though not clinical) levels of problem behavior, as well as assertiveness, disobedience, and aggression.

Growing Up in Poverty Project (UC Berkeley):

• A consistent, positive, and strong relationship between rates of child development in the cognitive domain and participation in center-based programs.
• Developmental effects were strongest for measures of school readiness and for children who were in a center at both Waves I and II.
• The center effect remained sizable even in models that included other possible determinants of development, such as age, ethnicity , mother's education, mother's work and welfare status, and income.
• Children also display stronger cognitive growth when caregivers are more sensitive and responsive, and stronger social development when providers have education beyond high school.
• Children in family child care homes show more behavioral problems but no cognitive differences.

Early Head Start (Mathematica):

• Early Head Start children, at 2 years of age, scored higher on a standardized assessment of infant cognitive development than the control children and were reported by their parents to have larger vocabularies and to use more grammatically complex sentences.
• On the assessment of cognitive development, Early Head Start children were less likely to score in the at-risk range of developmental functioning; Early Head Start is moving some children out of the lowest-functioning group, perhaps reducing their risk of poor cognitive outcomes later on.
• Early Head Start 2-year-olds lived in home environments that were more likely to support and stimulate cognitive development, language, and literacy, based on researchers’ observations using a standard scale. Their parents were more likely to read to children daily and at bedtime.
• Early Head Start mothers were more supportive, more sensitive, less detached, and were more likely to extend play to stimulate cognitive and language development, based on researchers’ observations of semi-structured parent-child interactions.
• Early Head Start mothers were less likely than control mothers to report spanking their child in the past week and described milder discipline techniques.

National Study of Child Care for Low-Income Families (NCCP, Abt):

• Federal spending on child care after PRWORA:
• Spending by most states in the study grew dramatically during the Child Care and Development Fund’s first three years. The median adjusted spending per federally-eligible child nearly doubled in the study states.
• The federal TANF Block Grants became the study states’ prime new source of optional child care funding during these years.
• Growth in state spending on quality activities kept pace with growth in total child care spending.
• Meeting the demand for child care:
• In the two-year period following the implementation of the PRWORA, states provided child care subsidies to many more children.
• Despite the great increase in the number of children receiving subsidies, on average states in the study served only 15 to 20 percent of federally-eligible children in April 1999, and no state served more than 25 percent.
• States were able to meet the demand for child care for families who were receiving TANF.
• Most of the growth in child care subsidies was accounted for by children in families who had left TANF or who had never received it.
• Child Care Supply and Quality Issues:
• While state and community informants believed that parents entering the workforce were generally able to find child care and they did not see the anticipated effects of welfare reform on the supply of regulated care, in many instances they reported on long-standing shortages in supply. Reported shortages were often in low-income neighborhoods or in types of care used more heavily by low-income families.
• Pressures created by a strong economy, rather than those exerted by welfare reform, were blamed for shortages in the supply of child care.
• While there is wide variation in states’ investments in child care, those investments, and states’ discretionary spending on quality and supply enhancement, increased substantially over the last two years.
• In most states, funds for quality initiatives are allocated at the state level, and are used for a wide variety of programs and activities, most of them small in scope.
• Few initiatives were identified that targeted child care used by low-income families.
• Efforts to stimulate supply may not result in increased supply, but may simply counterbalance attrition cause by strong market forces, particularly among family child care providers.