At Ohio Gov. Mike DeWine’s State of the State address earlier this month, he announced a voucher program to help low-income Ohio families pay for child care.
DeWine’s current proposal is to provide vouchers for families making up to 200% of the federal poverty level, $60,000 or less for a family of four. This follows in the footsteps of other proposals to target child care assistance to low-income families.
I’ve written before about how child care is a double-edged policy problem. Often when we talk about child care, especially from an economic development perspective, we think about it as a way to free up time for parents and allow them to work. But child care arrangements are also the place where children spend substantial time during some of their most important years of development.
Because of the amount of time spent in child care, the quality of child care arrangements can have significant impacts down the road for child development.
A key problem with the child care system is that parents often need to prioritize child care that fits their work needs. Young children get no say in the child care arrangements they take part in and don’t have the capacity to evaluate which child care arrangements will lead to better outcomes for them down the road.
This is a central problem with child care Ohio State Professor Emeritus David Blau writes about in his book, “The Child Care Problem: an Economic Analysis.” Since parents are making decisions for children, they often underconsume high-quality child care.
This is why Blau recommends a system in this book that does two things: provides subsidies to low-income families to handle the equity problem of child care while giving higher subsidies to high-quality centers to handle the above efficiency problem.
Quebec had an experiment that shed some light on what happens when only one of these two levers is pulled. In the late 90s, the Canadian province enacted a universal child care program that charged families just $5 a day for child care. Policymakers declined, however, to tie subsidies to child care quality.
An evaluation of this program after 20 years conducted by well-regarded economists found the program led to a sizable shock in outcomes for children. Not only did this program lead to negative effects on non-cognitive outcomes that persisted into school years, it also led to worse health, lower life satisfaction, and higher crime rates for these children later in life.
Ohio has been bandying about different proposals around child care quality for years now. The current law of the land is the Step Up to Quality program, a five-star child care program that provides higher subsidies to higher-quality programs. Last month, the Ohio Department of Children and Youth and Ohio Department of Job & Family Services proposed a new rule to reduce this five-tier rating system to a three-tier rating system which could reduce payments for quality.
Whatever the state settles on when it comes to payments for low-income families and centers, Blau’s recommendations still ring true: subsidies should be targeted toward low-income households to advance equity concerns and should be targeted toward high-quality centers to support child development. This ensures both low-income families today and children tomorrow are benefiting from public investment in the child care system.
This commentary first appeared in the Ohio Capital Journal.