Data: Watching the Kiddies

Michael W. Lynch from the May 2002 issue

As the 1996 welfare reform law comes up for reauthorization this year, one statistic is sure to be heralded: Only 15 percent to 20 percent of families eligible for child care subsidies receive them. The implication is that government is shortchanging the needy. Don't buy it. State and federal spending on child care per eligible family nearly doubled from 1997 to 1999, according to a 17-state study by the consulting firm ABT Associates.

Being eligible for child care subsidies should not be confused with actually wanting them. The 1996 law set the federal eligibility standard at 85 percent of the state median income, which in some states totals more than $36,000 a year for a family of three. The 17 states covered by the study are, in fact, meeting the child care needs of welfare moms, while still spending the most resources on families that have already left or never been on welfare. Five of the 17 states have no waiting lists. "The stigma associated with government support," the study notes, "means that some eligible family will never apply for subsidies even when child care assistance would clearly be beneficial."