Welfare Reform:

Implications of Increased Work Participation for Child Care

HEHS-97-75: Published: May 29, 1997. Publicly Released: Jun 6, 1997.

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Pursuant to a congressional request, GAO reviewed: (1) the extent to which the current supply of child care will be sufficient to meet the anticipated demand for child care under the new welfare reform law; and (2) other challenges that face low-income families in accessing child care.

GAO noted that: (1) as states implement the new welfare reform legislation and are required to move larger percentages of their caseloads into work-related activities, greater numbers of welfare recipients are likely to need child care; (2) consequently, the gap that exists between the current supply of known child care and child care demand is likely to grow, with disproportionately larger gaps for infants and school-aged children; (3) these gaps will have to be addressed through growth in the supply of known child care, care unknown to the states, or, more likely, both; (4) if supply of known child care does not increase, states may have to rely more on care for which they have little information; (5) thus, the assistance they can provide to welfare parents in locating care may be more limited; (6) state and local officials in the 4 cities and counties GAO reviewed regarded their current supply of known child care as inadequate for meeting even the demand they currently face for children in certain age groups, particularly for low-income populations in three of the areas reviewed; (7) unless the supply of known child care for certain age groups at these sites is increased, the gap between supply of known care and anticipated demand is likely to become even greater as welfare reform is fully implemented; (8) for example, GAO estimated that the supply of known child care in Chicago would be sufficient to meet just 14 percent of the demand for infant care that will probably exist by the end of fiscal year 1997; (9) without any increase, by 2002, when states will be required to have achieved welfare work participation rates of 50 percent, the known supply could meet only about 12 percent of the estimated demand for infant care and even less in the poorest areas of Chicago; (10) issues other than gaps between supply and demand that could also affect low-income families' access to care include the price of care, the availability of nonstandard-hour care, transportation issues, and the availability of quality care; (11) for example, GAO's work shows that child care consumes a high percentage of poor families' income; (12) another critical issue facing poor families is that many welfare parents are likely to obtain work at low-skill jobs that operate on nonstandard schedules; (13) however, many of the known providers at the sites reviewed did not offer child care at nonstandard work hours; and (14) the number of providers who offered this type of care ranged between 12 and 35 percent of the total number of known providers in the four child care markets GAO reviewed.

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