Isenberg Researchers Address Inequity Concerns in Access to Child Care Subsidy Support

Access to child care is considered critical to achieving a better and more sustainable future for all. Increasing the accessibility of child care helps children improve their long-term outcomes, parents maintain employment or attend school, and society achieve economic stability. While access to child care has these far-reaching positive effects on children, families and society, it is prohibitively expensive throughout the United States (U.S.). On average, U.S. families spend $10,000 per year on child care, which accounts for as high as 60% of a family’s annual income in certain states.

Child care subsidy voucher programs are widely used by the U.S. federal and state governments to provide monetary support to income-eligible families to access high-quality child care at a private child care provider that best suits their needs. This subsidization results in the provision of care to over 1.4 million children monthly. As is with many social welfare programs, ‘the intention is good, but realization falls short’—there are some obstacles that remain to be conquered to realize the full potential of these useful voucher programs. It has been documented in several governmental reports that the income-eligible families are often unable to accept the offered vouchers due to low supply of voucher-accepting providers within their communities. Unable to accept the offered subsidy assistance, such families and the society at large continue to bear an avoidable financial burden.

Supported by a UMass Amherst Public Service Endowment Grant, Isenberg School of Management professors Priyank Arora and Senay Solak, along with their doctoral student, Wei Wei, worked closely with the Department of Early Education and Care and the local not-for-profit agencies in Boston and Springfield to understand intricate details of the child care subsidy voucher program in Massachusetts. They combined all of these details to develop a mathematical model to quantify the inequity in socioeconomic distress experienced by families across different regions that are unable to utilize the subsidy assistance. Wei explains, “Our model setup interrelates practical factors such as, availability of public transport, willingness of local communities to support social welfare programs, and alternative local avenues of child care for a low-income family, with the family’s inability to accept and utilize the subsidy voucher.” The analysis of the model reveals how and when regional differences in each of these factors lead to significant differences in access to affordable child care within the same geographic coverage area.

Arora points out that the local agencies (commonly referred to as, Child Care Resource and Referral agencies) that have the mission to enhance the impact of these voucher programs are faced with a complex and novel task. “On the one hand, scarcity of funds and having to work within the limitation posed by on-ground realities that impact a family’s acceptance decision make their task complex. On the other hand, these agencies can indeed affect a family’s decision by building up the local supply of voucher-accepting child care providers.” In particular, this can be achieved by appropriately allocating funds from their operating budget toward offering partner development services, such as quality accreditation, technology management, and cleaning and other safety related programs for the providers, and conducting outreach to enroll more private providers in the voucher program. The optimization-based tool developed by the team recommends specific amounts of funds to be invested in different types of supply-enhancing activities across different regions (urban versus rural) within a coverage area. By doing so, these local agencies can ensure that the income-eligible families within any given region have a larger set—in terms of quantity as well as quality—of voucher-accepting providers to choose from.

The research team also uses data from the U.S. Census Bureau, the child care and early education literature, and interviews with multiple experts in the domain of child care subsidy vouchers to contextualize their tool for the local agency in the Western Massachusetts area. “Our extensive numerical experiments show an approximately 7 percent reduction in inequity in access to subsidized child care if the organization were to allocate funds as proposed by our framework. This is primarily driven by the recommendation to increase investments in conducting outreach, especially in rural regions,” states Solak. Solak further adds, “The COVID-19 pandemic has enhanced the relevance and applicability of our research study. Given that a disproportionate number of essential workers belong to underserved and marginalized communities, ensuring equitable access to affordable child care is critical to facilitating a safe and robust functioning of the economy.”

The related research paper has been accepted for publication at Production and Operations Management, a premier journal in the field of business administration and management science. For more details, please access an online copy of the paper here.