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Low-income families and the cost of child care: State child care subsidies, out-of-pocket expenses, and the cliff effect

In this paper, we first give an overview of CCDF child care assistance, touching briefly on how certain eligibility policies vary across states. Next we discuss the full, unsubsidized out-of-pocket cost of child care as well as the amount families receiving child care assistance pay. We then turn to the focus of the analysis: how subsidized families' costs rise with increases in income, up to the point where families no longer receive assistance and become responsible for paying the full amount charged by providers. At this point, families may see relatively small increases in income coupled with large increases in child care costs, sometimes referred to as the "cliff effect." We examine selected states as examples of how families' child care costs can change depending on a state's assistance policies. This analysis uses data from the CCDF Policies Database, focusing on state policies as of October 1, 2011 (Giannarelli et al. 2012). (author abstract)
Resource Type:
Reports & Papers
United States
State(s)/Territories/Tribal Nation(s):
California; Georgia; Idaho; New Hampshire; New Jersey; Washington

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