Child care subsidy, child care costs, and employment of low-income single mothers

Abstract

Abstract This paper examines the relationship between welfare reform and child care costs among low-income single mothers and the effects of post reform child care subsidy receipt on the status and duration of these mothers' employment. A two-step model analysis of data from the Survey of Income and Program Participation (1993, 1996, and 2001 panels) revealed marginal effects of welfare reform on child care costs, indicating that child care costs increased significantly among low-income single mothers after welfare reform. Results from a Tobit model revealed that child care subsidy receipt also had significant effects on employment status. Finally, families with only a mother and children in the household had a higher probability of using paid child care and spent more on care than mothers with other adults in the household.