Dynamics of child care subsidy use and material hardship

Child care subsidies aim to promote economic stability and child development by reducing child care costs for low-income families. However, short and intermittent use of the subsidy program raises concerns about its potential interference with promoting the economic well-being of low-income parents. Limited research has explored the implication of subsidy instability on material hardship and the role of social support in this context. This study examines how different patterns of subsidy instability contribute to the risk of material hardship and whether informal social support buffers the negative association of subsidy instability with material hardship risk. Findings are based on a survey of child care subsidy participants who entered the program in 2011/2012 in Illinois and New York (n = 543). The survey was administered approximately 18 months after program entry. Descriptively, about two-thirds of subsidy participants (former and current) experienced some form of material hardship. Multivariate results find that compared to continuous subsidy spells, different patterns of subsidy instability are associated with an increased risk of material hardship. Social support mitigates material hardship risk, particularly for recipients who have recently left the subsidy program. Results suggest that policy efforts to improve subsidy stability would have positive implications for alleviating hardship. Recent policy changes designed to improve subsidy stability are discussed.