Journal of Family and Economic Issues

, Volume 39, Issue 4, pp 662–682 | Cite as

Do Child Care Subsidies Increase Employment Among Low-Income Parents?

  • Elizabeth E. Davis
  • Caroline Carlin
  • Caroline Krafft
  • Nicole D. Forry
Original Paper


State child care subsidy programs are intended to support the employment of low-income parents, particularly for families receiving or likely to receive Temporary Assistance for Needy Families. To study the impact of child care subsidies on employment, this study used detailed data from a survey of low-income parents in Minnesota, linked with administrative data on subsidy receipt, to estimate endogenous switching models of subsidy receipt and parent work status. Parental preferences about the child development-related characteristics of child care settings were the basis for an instrumental variable used to predict subsidy receipt. Receiving a subsidy significantly increased the probability of employment and especially of full-time employment. The findings suggest that expansion of the child care subsidy program could lead to increased employment among low-income parents with young children.


Child care Work support Child care subsidies Employment Endogenous switching model Instrumental variables 

JEL Classification

J22 J13 I38 



Funding for this research was provided through Grants #90YE098 and #90YE0132 from the Office of Planning, Research and Evaluation in the Administration for Children and Families, US Department of Health and Human Services. The contents and conclusions are solely the responsibility of the authors and do not necessarily represent the official views of the Office of Planning, Research and Evaluation, the Administration for Children and Families, or the US Department of Health and Human Services. The sponsors had no role in the collection, analysis or interpretation of the data, nor in the decision to submit the article for publication. The survey design and data collection were part of a larger research project led by Kathryn Tout at Child Trends. Davis also acknowledges the support of the USDA National Institute of Food and Agriculture, Hatch Multistate Project NE-1049 and Minnesota Agricultural Experiment Station Project MIN-14-081.

Compliance with Ethical Standards

Conflict of interest

The authors declare they have no conflicts of interest.

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.

Informed Consent

Informed consent was obtained from all individual participants included in the study.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Elizabeth E. Davis
    • 1
  • Caroline Carlin
    • 2
  • Caroline Krafft
    • 3
  • Nicole D. Forry
    • 4
  1. 1.Department of Applied EconomicsUniversity of MinnesotaSt PaulUSA
  2. 2.Department of Family Medicine and Community HealthUniversity of MinnesotaMinneapolisUSA
  3. 3.Department of EconomicsSt. Catherine UniversitySt PaulUSA
  4. 4.Child TrendsBethesdaUSA

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