Child Care in California:
A Short Report on
Subsidies, Affordability, and Supply
This report summarizes recent child care information for the state of
California. The first section provides new information on
child care subsidies, based on eligibility estimates
generated by the Urban Institute and state administrative data reported to
the U.S. Department of Health and Human Services (HHS). The second
two parts, on affordability and
supply, draw on state and local data collected by the
Urban Institute during the summer of 1999 under contract with HHS.
A companion document to the national report entitled
"Access to Child Care for Low-Income
Working Families," the California report is one in a series of nine state
reports. [The other reports are:
Connecticut, Delaware,
Florida, Louisiana,
Michigan, Pennsylvania,
Texas, and Utah]
Figure 1. Child Care and Development Fund (CCDF) Eligibility and
Receipt in California
Sources: Urban Institute simulations and state administrative
data reported to the Child Care Bureau.
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3,482,000 children under age 13 (or under age 18 if disabled) live in families
where the family head (and spouse if present) is working or is in an education
or training program, as shown in Figure 1. Children across all family
income levels are included in this estimate. Most of these children
(3,280,000) are under age 13 and living with working
parents.1
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1,382,000 of these children, and 930,000 families, are estimated to meet
Californias income guidelines for child care assistance under the Child
Care and Development Fund (CCDF) October 1997 state plan. The eligibility
estimate would be even higher 1,732,000 children
if California raised income eligibility limits to 85 percent of State Median
Income, the maximum level allowed under Federal law.
2
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To be eligible under Californias October 1997 state plan, a family
of 3 had to have income below $30,306, or 75 percent of State
Median Income.
-
Most eligible children (85 percent) live in families with annual income below
200 percent of the Federal poverty threshold and more than one-third (35
percent) are living in poverty. About 15 percent live in families that
report receiving cash welfare.
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Most (1,223,000) eligible children are under age 13 with working parents;
the remaining children have parents in education/training programs or are
disabled youth under 18.
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101,000 children in California received child care subsidies through CCDF-funded
programs in an average month in 1998. This estimate suggests that 7
percent of the eligible population under state limits (and 6 percent of children
who would be eligible under the Federal maximum limits) were served with
CCDF funds.3
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The Child Care and Development Fund (CCDF) is the major source of Federal
funding allocated to states to subsidize the child care expenses of low-
and moderate-income families so they can work, or attend education or training
programs. Using CCDF dollars along with state funds, California has
designed its own child care program within broad parameters specified under
federal law. CCDF-funded subsidies, and the number of children that
the state reported were served with these subsidies, are highlighted in this
report because CCDF is a primary source of funding in most states.
Also, CCDF administrative data is the most comparable source of child care
data across states. It should be noted, however, that California, like
many other states, also uses other funding sources to provide child care
subsidies.
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In 1998, there were an estimated 200,000 children on the waiting list
for government subsidies in California. Many counties in the state
have waiting lists in excess of 1,000 children. Low-income families
in California may have to wait for more than a year before they receive child
care subsidies.4
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The state of California has a priority system for determining who
receives child care subsidies. Children receiving cash welfare assistance
through CalWORKS and children at-risk in the protective services system are
guaranteed child care subsidies. Low-income working families receive
subsidies as funds become available.
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In addition to the waiting list, state staff believe that there are eligible
families that do not apply for child care subsidies. This belief is
corroborated by staff from child care resource and referral agencies within
the state of California.
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Prices for child care vary considerably, by such factors as geographic area,
type of provider and age of child. Figure 2 shows the average monthly
prices for child care in California. Given that these are average prices,
it is clear that many families pay more or less than this amount.
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Centers in California charge an average of $420 per month for preschool
care and $577 per month for infant care, as shown in Figure 2.
This means that a family with $15,000 in income and one preschool child in
an average-priced center would spend more than one-third (34 percent) of
its total monthly income on child care expenses. Average-priced infant
care would represent an even higher share (46 percent) of monthly income
for a family earning $15,000.
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Family child care homes in California charge an average of $422 per
month for preschool children and $432 per month for infants.
This means that a family with $15,000 in income and one child in an
average-priced family child care home would spend 34 percent of its monthly
income on care for a preschool child or 35 percent for an infant.
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Families who receive child care subsidies usually pay much smaller monthly
co-payments, rather than the full market rate. Such co-payments
are established under a sliding fee schedule, and are based on family size,
income and the number of children in care. For example, a family with
$15,000 in income and one preschooler or infant in an average-priced center
in California would be charged a monthly co-payment of $43, or about
three percent of monthly income, as shown in Figure 2.
Figure 2. Child Care Prices and Co-Payments for a
Hypothetical California Family of Three Earning $15,000 with One Child in
Care
|
WITHOUT SUBSIDY |
WITH SUBSIDY |
Average Monthly Prices
(Full Time Care) |
% of Income
(Family Income of $15,000 Annually) |
Monthly Co-Payments*
(If receive subsidy) |
% of Income*
(Family Income of $15,000 Annually) |
INFANT (1 year) |
Center-based |
$577 |
46.1% |
$43 |
3.4% |
Family child care home |
$432 |
34.6% |
$43 |
3.4% |
PRESCHOOLER (4 years) |
Center-based |
$420 |
33.5% |
$43 |
3.4% |
Family child care home |
$422 |
33.8% |
$43 |
3.4% |
* State policy does not prevent providers from charging parents additional
amounts, above the co-payment, if the providers rates exceed the state
reimbursement level. Maximum reimbursement rates in California, however,
exceed the statewide average prices. Figures in this table represent
the minimum co-payment.
Source: Price data collected by the Urban Institute from the
California Child Care Resource and Referral Network, a statewide child care
resource and referral agency, summer 1999. Co-payment data collected
by the Urban Institute from the California Department of Education, summer
1999.
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The adequacy of the supply of child care varies across California.
To determine the level of unmet need, the California Child Care Resource
and Referral Network uses a combination of census data and child care supply
data from local resource and referral networks. Licensed child care
supply meets only 21 percent of the estimated need for licensed care for
children of all ages. Supply gaps vary throughout the state.
For example, in Alpine County, licensed child care meets 78 percent of the
need for all children; in Los Angeles County, supply meets only 17 percent
of the need.
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Throughout the state of California, infant care is in short supply.
For example, in Los Angeles County, San Diego County, San Francisco County,
and Siskiyou County less than 5 percent of slots in licensed care centers
are infant slots.
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Only 4 percent of all of the licensed and license-exempt centers, and only
33 percent of the licensed family child care homes listed with the California
Child Care Resource and Referral Network provide care during odd hours,
such as weekends, evenings or over night.
1. Estimate based on microsimulations using the
Urban Institute's TRIM3 model, guidelines in the state's 1997-99 CCDF state
plan, and three years of Current Population Survey data (calendar years 1995-97).
Back to text
2. Ibid. Back to text
3. Estimates based on state administrative data
reported to the Child Care Bureau and adjusted to reflect children funded
through CCDF only. 1998 figures based on April-September 1998.
Back to text
4. Waiting list data were obtained and compiled
by the Urban Institute from the California Child Care Resource and Referral
Network (a statewide child care resource and referral agency).
Back to text
5. Information in this section was obtained and
compiled by the Urban Institute from the California Child Care Resource and
Referral Network (a statewide child care resource and referral agency).
Back to text
6. Information in this section was obtained and
compiled by the Urban Institute from the 1999 California Child Care Portfolio,
California Child Care Resource and Referral Network.
Back to text
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