by Brenda Ball Cuthbertson

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The welfare system in the United States is embarking on a major transition. Aid to Families with Dependent Children (AFDC), an entitlement program enabling low-income single mothers to stay home with their children, has been replaced with Temporary Assistance to Needy Families (TANF), a time-limited benefit that requires parents to work or participate in work-related activities as a condition of aid receipt. If parents are to meet work requirements, they must have access to child care services. Yet cost of care or an insufficient supply of  child care providers could limit child care accessibility. In this report, I evaluate Los Angeles County’s plan to assist recipients in securing child care services.

Los Angeles County’s welfare plan operates under the California’s Work Opportunity and Responsibility to Kids Act (CalWORKs). The CalWORKs legislation intends to improve  access to child care by offering direct payments to child care providers on behalf of recipients. Since reimbursement rates vary by the type of provider selected, it is necessary to anticipate  the type of care that parents will select in order to secure sufficient funding for subsidies. Types of care include licensed centers, licensed family day care, and exempt care – care provided  by a friend, relative, or other person who is exempt from licensing. The state and county disagree over the amount of funds necessary to cover the cost of subsidies in year one. My  investigation suggests that the state underestimated the amount required because they failed to consider changes in policy that would lead more parents to rely on licensed care.

Calculating the sufficiency of child care providers has proven to be an arduous task for planners due to the immeasurable presence of exempt care. Identifying the percentage of recipients    likely to rely on licensed care and comparing those estimates to known licensed supply, reduces the need to assess exempt care. Focusing on licensed care is reasonable since planners and  policy makers have little control over the amount or development of exempt care.

Using data on AFDC recipients in California, I identify the types of child care parents have traditionally used and consider policy changes that may increase licensed care use. I find that   greater hours of work and access to child care subsidies expand the use of licensed care. Based on my findings and other relevant research, I set high and low licensed care demand  estimates to evaluate current funding and supply provisions. To target development funds where they are most needed I first compare the number of Calworks children expected to seek  licensed care to the available licensed care slots within zip code areas and then note differences in demand for licensed care among different ethnic groups or among children of varying age.

Key Findings

Demand

• · Percentage of recipients relying on licensed child care will likely increase (up to about 50%) under CalWORKs Funding
• · A child care subsidy funding shortage between $10 million and $40million dollars is expected for FY98-99

Supply

• · Zip codes with high concentrations of CalWORKs recipients have the greatest licensed child care shortages
• · Shortages range from 200-600 slots in the fifty zip codes with the greatest needs. Some recipients in high need zip codes may be able to access care in neighboring zip codes that have a larger supply of providers. However, many of these zip codes are clustered together in south central Los Angeles limiting access to care in adjacent zip code areas
  
  Development
• · Preschoolers are the most likely group to seek licensed care, followed by infants
  · Latinas’ preference for licensed child care does not differ from the preferences of non- Hispanic whites until immigrant status is taken into account. Latino immigrants are more likely to prefer center care than either non-immigrants or Whites

Recommendations for Action

Address the funding shortage

• · Investigate additional funding sources- Social Services Block Grant, CalWORKs Block Grant
• · Add insufficient subsidies to list of “good cause exemptions” from work requirements
• · Monitor the type of care recipients use to get an accurate predictor of amount of funding needed in FY99-00

Address supply shortage

• · Target high shortage zip code clusters for development efforts
• · Monitor employment/compliance rates to identify areas where the need for care grows at a faster rate
• · Recruit school districts to offer before-and-after-school-care
• · Encourage centers to offer off-hour care meeting the needs of recipients in service industries
• · Expand the number of Family Day Care Homes while increasing education requirements that will enhance the quality of this type of child care