Our latest report on early childhood education finds the original goals of 90s-era welfare reform produced state child care policies that had detrimental impacts on child care quality in Wisconsin and that may be difficult to reverse under the state's new quality ratings system.
We find that as the child care subsidy system became operational, certain policy decisions produced results -- many of which were unintended -- that ended up boosting child care costs for the state while reducing child care quality. Those include:
- Creating a new, less regulated category of care provider, which was intended to allow parents broader choices in providers, quickly create jobs, and keep child care costs low for parents and the state.
- Sharing costs with parents by basing co-payments on the cost of care, as opposed to the parents' income, which would have allowed parents to opt for more costly care only if they wished to pay more out of pocket but which, ultimately, could not be implemented.
- Creating a more restrictive definition of "low-income," in order to serve the working poor in general, and not just those obtaining or seeking jobs as part of the W-2 program.
- Tying subsidy rates to prices in the private market, which was intended to provide low-income parents with access to the entire market while also relying on competition to keep the state's costs in check.
Each of these four policies helped the state achieve its primary goal of providing a sufficient child care supply that would allow low-income parents to move from welfare to work, but at a high cost to the state and at the expense of quality within the child care market.