Child care subsidies and care arrangements of low-income parents

We study the design of child care subsidies in an optimal welfare problem with heterogeneous private market productivities. The optimal subsidy schedule is qualitatively similar to the existing US scheme. Efficiency mandates a subsidy on formal child care costs, with higher subsidies paid to lower income earners and a kink as a function of child care expenditure. Marginal labor income tax rates are set lower than the labor wedges, with the potential to generate negative marginal tax rates. We calibrate our simple model to features of the US labor market and focus on single mothers with children aged below 6. The optimal program provides stronger participation but milder intensive margin incentives for low-income earners with subsidy rates starting very high and decreasing with income more steeply than those in the United States. (JEL D82, H21, H24, J13, J16, J32)

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Effect of child care subsidies on price and quality of care for low -income families

10.25148/etd.fi13101558 ◽

1997 ◽

Author(s):

Sudhersena Alalasundaram

Keyword(s):

Quality Of Care ◽

Child Care ◽

Low Income ◽

Child Care Subsidies ◽

Low Income Families

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The North Side Children's Agency (B): Finances versus Mission

Kellogg School of Management Cases ◽

10.1108/case.kellogg.2016.000358 ◽

2017 ◽

pp. 1-7

Author(s):

Anne Cohn Donnelly ◽

Trinita Logue

Keyword(s):

Child Care ◽

Low Income ◽

Board Members ◽

Child Care Subsidies ◽

Working Parents ◽

The North ◽

North Side ◽

Governance Model ◽

Children’S Agency ◽

The Government

The North Side Children's Agency (NSCA) was a twenty-three-year-old nonprofit organization founded to serve very low-income working parents who qualified for income-based government child care subsidies. In support of its mission, the NSCA operated year-round, full-day child care programs at seven different sites for children from six weeks through twelve years of age. It employed a standard nonprofit governance model with a volunteer board of directors, each of whom was assigned to one of six committees, which functioned quite independently. After years of success, in 2004 the NSCA faced a serious cash shortage and its first deficit in a decade. Board members were not only surprised by the crisis but also unprepared to deal with the short- and long-term issues it raised. Board members required strong leadership to organize them to identify the causes of the crisis and think strategically about the organization's response.Anticipate how changes in the external environment and government policy can have an impact on a nonprofit's operations and mission Identify ways to organize governance to maximize effectiveness and minimize blind spots Use strategic thinking to identify causes of a crisis and potentially redefine a nonprofit's mission Identify the lack of control over funding and the overreliance on one funding source as primary pitfalls of nonprofits that deliver services paid for by the government>

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