Child Care as an Economic Incentive for the Working Poor

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Abstract
New federal funds from the Child Care and Dependent Block Grant Act of 1990 provide resources for states to increase the supply of subsidized child care for the working poor. Based on data from the largest urban county in North Carolina, the authors examine the potential economic implications of expanded child-care assistance for a group of parents for whom this support may be effective as an employment incentive and support: low-income parents with preschool children who have a definite offer of a job or are already employed and who are on the waiting list for state-subsidized child-care support. The results are generally supportive of the importance and potential cost-effectiveness of expanded subsidized child-care assistance as an employment incentive and support to this group of parents. Many of these parents may require additional supports to improve their employment prospects and to promote their employment stability.

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