United States General Accounting Office

GAO Report to the Ranking Minority Member,

Subcommittee on Children and Families,

Committee on Labor and Human

Resources, U.S. Senate

May 1997 WELFARE REFORM

Implications of

Increased Work

Participation for Child

Care

GAO/HEHS-97-75

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-270237 

May 29, 1997

The Honorable Christopher Dodd

Ranking Minority Member

Subcommittee on Children and Families

Committee on Labor and Human Resources

United States Senate

Dear Senator Dodd:

In August 1996, the federal government made major changes to the

nation’s welfare system when the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 was enacted into law. The act

abolished the Aid to Families With Dependent Children (AFDC) program,

which in fiscal year 1996 spent over $20 billion providing cash assistance

to more than 4.6 million families with about 8.6 million children. The new

law created block grants to states for Temporary Assistance for Needy

Families that have more stringent requirements for welfare parents to

obtain jobs in return for their benefits than AFDC did. The new law requires

that at least 25 percent of a state’s adult welfare caseload be working or

participating in work-related activities in fiscal year 1997, increasing to

50 percent by fiscal year 2002. To comply with these new work

requirements, significantly more welfare parents are likely to need child

care. State and local administrators are beginning to examine whether

their current supply of child care will be sufficient to meet the increased

demand for care—especially for particular groups of children. Data about

the states’ child care supply will be an important tool for states in helping

welfare parents successfully make the transition to work. Given this, you

requested that we (1) measure the extent to which the current supply of

child care will be sufficient to meet the anticipated demand for child care

under the new welfare reform law and (2) identify other challenges that

face low-income families in accessing child care.

To accomplish our objectives, we developed a methodology for estimating

(1) the magnitude of current demand for child care in family child care

homes and centers, (2) the future demand under the federal welfare law,

and (3) the extent to which the current supply of known family child care

homes and centers is capable of meeting current and future demand. For

purposes of this report, known care mostly consists of providers who are

Page 1 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

regulated by the state as well as some who are unregulated1 and listed in a

child care resource and referral agency (CCR&R) database.2

 Care unknown

to the state or the CCR&Rs includes relative care, unregulated family child

care, and care provided in a child’s home by a nanny. We elaborate further

on the different types of child care later in this report.

In calculating our estimates, we held the supply of known child care

constant. While the total supply of child care, known and unknown to the

states, should eventually increase in response to an increase in demand,

our model, by holding known supply constant, presents a picture of how

much current known supply would have to increase to meet the new

demand. Thus, the gap we identify is between known supply and

anticipated demand. This gap could be filled by care known or unknown to

the states or, more likely, by both.

Ideally, we would like to have measured the total supply of child care. We

recognize the important role that other types of care play in meeting child

care demand; however, our review focused on known care because it is

the type of care for which states and localities have the most

comprehensive data. In focusing on known care, we are making no

judgment about the quality of either type of care.

In developing our information, we analyzed child care supply data and

estimated child care demand at four sites—two urban and two

nonurban—in three states. Our selected urban areas were Baltimore City,

Maryland, and Chicago, Illinois; our nonurban sites were Benton and Linn

counties in Oregon. We selected these sites not only because they

provided a mix of urban and nonurban areas, but also because

comprehensive child care supply data were available from local CCR&Rs.

Other factors considered in our final selection were geographic diversity

and differences in the extent to which sites regulated their child care

providers.3

1

Regulated care is offered by providers whom the state requires to obtain a license or become

registered with the state; unregulated care is offered by providers whom the state does not require to

register to provide such services. The three states we reviewed require unregulated providers to meet

some requirements if they are caring for children whose child care costs are paid by the state.

Typically, the provider signs a form or checklist to certify that it meets or will follow certain basic

safety and health requirements.

2

CCR&Rs help match parents looking for child care with providers who can serve their specific child

care needs. Typically, these agencies are funded by state or local child care agencies, by private

employers, and through charitable contributions. In addition to helping parents find care, CCR&Rs

perform other services, including recruiting and training providers, helping states administer child care

subsidy programs, and maintaining a current and comprehensive database of an area’s child care

supply.

3

See app. I for further discussion of our methodology.

Page 2 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Results in Brief As states implement the new welfare reform legislation and are required to

move larger percentages of their caseloads into work-related activities,

greater numbers of welfare recipients are likely to need child care.

Consequently, the gap that exists between the current supply of known

child care and child care demand is likely to grow, with disproportionately

larger gaps for infants and school-aged children. These gaps will have to

be addressed through growth in the supply of known child care; care

unknown to the states; or, more likely, both. If supply of known child care

does not increase, states may have to rely more on care for which they

have little information. Thus, the assistance they can provide to welfare

parents in locating care may be more limited.

State and local officials in the four cities and counties we reviewed

regarded their current supply of known child care as inadequate for

meeting even the demand they currently face for children in certain age

groups, particularly for low-income populations in three of the areas

reviewed. Unless the supply of known child care for certain age groups at

these sites is increased, the gap between supply of known care and

anticipated demand is likely to become even greater as welfare reform is

fully implemented. For example, we estimated that the supply of known

child care in Chicago would be sufficient to meet just 14 percent of the

demand for infant care that will probably exist by the end of fiscal year

1997—1 year after enactment of the welfare reform legislation. Without

any increase, by the year 2002, when states will be required to have

achieved welfare work participation rates of 50 percent, the known supply

could meet only about 12 percent of the estimated demand for infant care

and even less in the poorest areas of Chicago. Thus, we estimated that, by

the end of fiscal year 1997, the demand for infant care could exceed the

known supply by about 20,000 spaces; by fiscal year 2002, this number

could increase to almost 24,000.

Issues other than gaps between supply and demand that could also affect

low-income families’ access to care include the price of care, the

availability of nonstandard-hour care, transportation issues, and the

availability of quality care. For example, our work shows that child care

consumes a high percentage of poor families’ income. In Benton County,

Oregon, infant care at a child care center consumes more than 20 percent

of the median household income for a poor family. Another critical issue

facing poor families is that many welfare parents are likely to obtain work

at low-skill jobs that operate on nonstandard schedules, such as janitor or

cashier. However, many of the known providers at the sites reviewed did

not offer child care at nonstandard work hours—hours outside the

Page 3 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

traditional “9 to 5” work schedule. The number of providers who offered

this type of care ranged between 12 and 35 percent of the total number of

known providers in the four child care markets we reviewed.

Background

Welfare Reform and Child

Care Demand

Before the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996, the Congress had enacted changes to the nation’s welfare

system in 1988 by passing the Family Support Act (FSA). This law created

the Job Opportunities and Basic Skills Training (JOBS) program, which

expanded upon previous programs designed to help families on welfare

obtain education, training, and work experience to become self-sufficient.

The Department of Health and Human Services (HHS) is the agency at the

federal level that was responsible for JOBS program administration and

oversight.

Recognizing the importance of child care to this effort, the Congress

provided for child care subsidies to welfare parents participating in JOBS

activities and to those who had recently moved from welfare to work. In

fiscal year 1996, the Congress appropriated $954 million to the states

through the child care programs established by FSA to help parents pay for

child care.4

 States also used the Child Care Development Block Grant

(CCDBG) as another source of funding to pay for the child care of JOBS

participants. CCDBG was created by the Omnibus Reconciliation Act of

1990; in fiscal 1996, the Congress appropriated $935 million to the states

through CCDBG.

FSA required states to have specific percentages of their welfare caseloads

participate in JOBS activities, starting at 7 percent in fiscal year 1991 and

rising to 20 percent by the end of fiscal year 1995. However, these

participation requirements were not applicable to the states’ entire welfare

caseload. States were permitted to exempt from JOBS activities welfare

clients who were already working 30 hours or more a week; ill or

incapacitated in some way; full-time students in elementary, vocational, or

high schools; children under the age of 16; or caring for a child under the

4

This amount is the federal appropriation for fiscal year 1996; it does not include the amount of state

dollars used. FSA created two sources of child care funding to be used by the states —AFDC child

care and transitional child care. Both were matched, open-ended entitlements, which meant that, in

order for a state to use the federal funds, the state had to first match the federal amount it needed with

state dollars.

Page 4 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

age of 3.5 Individuals who had not been exempted were required to

participate in 20 hours of JOBS activities per week, on average. If child care

was unavailable or resources were unavailable to pay for care, states

could either exempt welfare families or limit their participation in JOBS

activities. Because of these and other provisions, as well as the amount of

resources states devoted to their JOBS programs, the number of welfare

families participating in JOBS nationwide was limited—about 13 percent of

the entire caseload in any given month in fiscal year 1994. This low level of

participation limited demand for certain types of care that were more

difficult to find, such as infant care and care during nonstandard work

hours.6

Compared with the former welfare provisions, the Personal Responsibility

and Work Opportunity Reconciliation Act incorporates more stringent

work participation provisions and requires that a larger proportion of

welfare parents obtain work or participate in work-related activities. For

example, the new law requires states to move at least 25 percent of their

welfare families into work or work-related activities by fiscal year 1997

and at least 50 percent by fiscal year 2002. All welfare parents are required

to participate in these activities, but states have the option to exempt

single parents who are caring for a child up to 1 year old. States are also

permitted to lower the age-of-child exemption. Michigan, for example,

requires parents with children 3 months old or older to obtain work or

engage in work-related activities. Under the new law, more mothers are

likely to need child care, particularly for very young children.

Types of Child Care

Settings

Parents can choose from three types of child care settings: in-home care,

where a child is cared for in the child’s home; family care, where the child

is cared for in the home of a provider; and center care, where a child is

cared for in a nonresidential setting. In-home care, such as that provided

by au pairs or nannies, is usually provided for the child or children of one

family that resides in the home. Family child care, on the other hand, is

provided to a small number of unrelated children—typically fewer than

six—in the provider’s home. Child care centers, also known as nursery

schools or preschools, are nonresidential facilities that are able to care for

much larger numbers of children—on average, about 60. Centers are

located in a variety of places, including churches, schools, and businesses.

5

States were permitted to change the age-of-child exemption so that parents with children 1 year old or

older could be required to participate in JOBS activities. According to state plans submitted to HHS for

fiscal years 1994-1996, 13 states had planned to use this option.

6

Welfare to Work: Child Care Assistance Limited; Welfare Reform May Expand Needs

(GAO/HEHS-95-220, Sept. 21, 1995), pp. 4-6.

Page 5 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Additionally, care can be provided in family child care or in-home settings

by someone related to the child other than the parents, such as a

grandparent or an aunt. This care is commonly called relative care.

Child Care Providers Child care supply in a local market consists of providers who are known

and unknown to the states. Known providers are mostly those who are

regulated by the state but also include some who are unregulated.

Providers that are regulated by the state are required to meet certain

standards for operating that unregulated providers may or may not meet.

Such standards specify, for example, the number of smoke detectors a

provider needs to have, the maximum number of children per staff person

allowed, or that children are required to be immunized before coming into

a provider’s care. These standards are established by the state or local

government, and compliance with them is monitored periodically by the

governing entity.

Most center care in states is regulated, although some states exempt

centers from regulation if they are sponsored by a religious group or a

government entity or are regulated by another government body, such as a

local education department. Much family child care is unregulated: One

study has estimated that between 10 and 18 percent of family child care

homes are regulated.7

 In-home care and care by relatives is almost never

regulated by states.

States and localities maintain data about providers that can help parents in

choosing a provider and states and localities in determining the extent of

supply. Obtained from either CCR&Rs or state licensing offices, these data

include, for example, the total number of known providers at a given time,

whether providers are centers or family child care homes, where providers

are located, the number and ages of children they serve, how much they

charge, and their hours of operation. With these data, states have a tool to

facilitate matching child care needs of individual welfare families with the

services offered by certain providers. Helping parents find providers is

important given the difficulty welfare parents may have in negotiating the

child care market on their own, the barrier that finding child care can

become to welfare parents’ labor force participation, and the states’ own

incentive to move their welfare caseload into the workforce to meet

requirements of the new federal law. In addition, information about the

7

Willer, B., Hofferth, S., Kisker, E.E., and others, The Demand and Supply of Child Care in 1990

(Washington, D.C.: National Association for the Education of Young Children, 1991).

Page 6 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

supply of known child care providers allows states to target groups of

providers for communitywide supply-building efforts, if needed.

Factors Influencing the

Choice of Child Care

Setting

The child care setting parents use is frequently related to the age of the

child and the employment status of the mother. Many mothers with

children under the age of 2 who work full time place their children in the

care of a family child care provider as opposed to a center or in-home

setting. For example, in 1993, 40 percent of children under 1 year of age

whose mothers worked were cared for in a provider’s home; 38 percent of

children between 1 and 2 were also cared for in this setting. As children

reach preschool age, care in organized facilities, such as child care centers

and nursery schools, becomes more prominent, although the use of family

child care is still significant. Of children who were 3 to 4 years old and had

working mothers in 1993, approximately 37 percent were cared for in

centers. For those who were 4 to 5 years of age and whose mothers were

working, almost 42 percent were cared for in centers.8

Other important factors, such as family income, marital status, and the

number of days and hours of the day worked, also influence the choice of

child care setting. For example, low-income families whose annual income

falls below $15,000 generally rely more on relative care and less on

center-based care than do nonpoor families.9

 Low-income mothers who

are single and employed also rely heavily on relative care, although they

also make significant use of family child care homes and centers.10

Relative care is also used frequently by families whose jobs require them

to work nonstandard hours.

8

GAO analysis of the Survey of Income and Program Participation, U.S. Bureau of the Census, U.S.

Department of Commerce, fall 1993.

9

National Research Council, Child Care for Low-Income Families (Washington, D.C.: National

Academy Press, 1995), p. 7.

10Thirty percent of the children of low-income mothers who are single and employed are with relatives,

27 percent are in centers, and 21 percent are in family child care homes (Child Care for Low-Income

Families, p. 6).

Page 7 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Greater Need for

Infant and

School-Aged Care

Anticipated Under

Welfare Reform

For a number of years, the child care literature has documented the

difficulty in finding care for certain age groups of children and specific

types of child care, including care for infants and school-aged children,

children with disabilities, and children during nonstandard work hours.

Our earlier work found that, because of shortages in child care for infants,

school-aged children, sick children, and children with special needs as

well as shortages of care during nonstandard work hours, state and county

administrators had difficulty serving the child care needs of welfare

parents who were participating in the JOBS program.11

CCR&R staff, as well as state and local officials at the four sites we visited,

said that finding some of these types of care is still difficult. Officials at all

sites were concerned that the new federal welfare act or their own state

welfare initiatives might increase demand for certain types of care and

further exacerbate low-income parents’ problems in finding care. We

estimated that the current supply of known care in the four cities and

counties we reviewed can meet less of the demand for infant or

school-aged care than it can for preschool care (see table 1). We projected

that this gap will grow as higher work participation rates are required

under the new welfare act, assuming no growth in known supply. In Linn

County, Oregon, for example, we estimated that the supply of known child

care is sufficient to meet 45 percent of the current demand for school-aged

care. By the end of fiscal year 1997, when 25 percent of the state’s welfare

recipients will be required to participate in work or a work-related activity,

known supply could be sufficient to meet 43 percent of school-aged

demand, assuming there is no growth in that supply. In fiscal year 1999,

when 35 percent of the state’s welfare caseload will be required to

participate, known supply could be sufficient to meet 42 percent of the

demand; in fiscal year 2002, when participation rates of 50 percent are

implemented, known supply could be sufficient to meet 40 percent of the

demand.

11GAO/HEHS-95-220, Sept. 21, 1995.

Page 8 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Table 1: Estimates of the Percentage

of Child Care Demand That Could Be

Met by Currently Known Supply for

Various Age Groups, 1996-2002

Percentage of demand that could be met

by currently known supply under

welfare reform work requirements

Percentage of

current demand that

could be met by

currently known

supply

25%

participation

35%

participation

50%

participation

Baltimore City

Infant 37 33 32 30

Preschool 144 130 125 118

School-aged 49 43 41 38

Chicago

Infant 16 14 13 12

Preschool 75 68 65 62

School-aged 23 20 19 17

Benton County

Infant 67 64 63 61

Preschool 92 90 89 87

School-aged 66 64 63 62

Linn County

Infant 44 40 39 38

Preschool 74 71 69 68

School-aged 45 43 42 40

At all of our sites, CCR&R staff were the least concerned about the

availability of preschool care, as compared with that for other age groups,

because they believed the supply of known preschool care is the most

adequate to meet demand. In Baltimore City, for example, we estimated

that the supply of known preschool care exceeds the current demand as

well as estimated future demand under the new welfare act, as shown in

table 1. Given the city’s current excess known supply for this age group,

CCR&R staff in Baltimore City said they are not encouraging prospective

providers to offer care for preschoolers.

While examining the percentage of demand that known supply is capable

of meeting is a useful way to present a picture of child care at various

sites, it masks the size of the problem at some sites. For example, in

percentage terms, the supply of known infant care in Baltimore City could

be sufficient to meet about 37 percent of the demand for such care; in

absolute terms, that supply could leave an unmet demand for care of over

3,000 infants, as shown in table 2. Similarly, while known supply could be

sufficient to meet about 75 percent of the demand for preschool care in

Page 9 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Chicago, it could leave the parents of more than 13,000 preschool children

looking elsewhere for care.

Table 2: Estimated Gaps Between

Known Supply and Demand for Child

Care for Various Age Groups,

1996-2002

Gaps between known supply and

demand under welfare reform work

requirements Current gap

between known

supply and

demand

25%

participation

35%

participation

50%

participation

Baltimore City

Infant 3,369 4,037 4,304 4,704

Preschoola a a a a

School-aged 6,115 7,901 8,615 9,687

Chicago

Infant 17,046 20,402 21,744 23,757

Preschool 13,450 19,247 21,566 25,045

School-aged 26,393 31,590 33,669 36,787

Benton County

Infant 147 171 181 196

Preschool 100 136 150 172

School-aged 355 389 403 424

Linn County

Infant 388 443 465 498

Preschool 470 561 597 652

School-aged 828 920 957 1,012

aNo numbers are shown for preschool children in Baltimore City because we estimated that

supply for preschool care currently exceeds demand and will do so under welfare reform.

Need for Infant and

School-Aged Care

Greatest in Poor

Areas

Areas with the lowest average household income will probably be most

affected by welfare reform. As shown in table 3, the largest gaps between

known supply and demand in the poor areas12 of the selected sites exist

for infants, school-aged children, or both. For example, in poor areas of

Chicago, currently known supply is sufficient to meet 61 percent of the

demand for preschool care, compared with 11 percent and 30 percent of

the demand for infant and school-aged care, respectively. A similar

12In general, we defined poor areas as those census tracts with median household incomes below

$27,750, or slightly over 200 percent of poverty for a family of four. We recognize that child care

markets are neither defined by census tracts alone nor completely segregated so that poor parents

purchase care only in poor areas and nonpoor parents in nonpoor areas. Research does suggest,

however, that parents prefer to use providers close to their home.

Page 10 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

relationship between these types of care exists in nonpoor areas of

Chicago as well.

Table 3: Estimates of the Percentage of Child Care Demand That Could Be Met by Currently Known Supply for Poor and

Nonpoor Areas, 1996-2002

Percentage of current demand that

could be met by currently known

supply

Percentage of demand that could be met by currently

known supply in poor areas under welfare reform work

requirement

Nonpoor areas Poor areas 25% participation 35% participation 50% participation

Baltimore City

Infant 48 32 27 25 23

Preschool 237 109 94 89 83

School-aged 75 36 29 27 25

Chicago

Infant 22 11 8 7 7

Preschool 105 61 53 50 46

School-aged 21 30 24 22 20

Benton County

Infant 62 69 61 58 54

Preschool 98 80 75 73 71

School-aged 66 60 54 52 50

Linn County

Infant 48 34 29 28 26

Preschool 92 44 41 40 38

School-aged 49 35 31 30 28

While currently in both poor and nonpoor areas the gap between demand

and known supply is greatest for both infant and school-aged care, this

condition could worsen in poor areas of our sites as the welfare reform

legislation is implemented. Given that families on welfare generally live in

poor areas, the increase in demand for child care resulting from welfare

reform will probably be greater in poor areas than in nonpoor areas. Thus,

for example, while the supply of known school-aged care in the poor areas

of Baltimore City is sufficient to meet about 36 percent of current demand,

assuming no growth in the known supply, the percentage could decrease

to about 25 percent in fiscal year 2002, when 50 percent of the welfare

caseload is required to participate in work or work-related activities.

As previously discussed, some of the largest current and future gaps in the

known supply could exist for infants at the four sites. In some instances,

Page 11 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

these gaps are even greater in poor areas than at the site as a whole. For

example, although we estimated that the known supply for all of Chicago

is sufficient to meet about 16 percent of current demand for infant care

(see table 1), the known supply in poor areas of Chicago is capable of

meeting only 11 percent of demand (see table 3). As implementation of the

welfare reform legislation progresses, this figure could drop to 7 percent

in fiscal year 2002.

A gap also exists between the percentage of demand that is met by the

supply of known preschool care overall and the percentage that is met in

different areas. For example, in Linn County, Oregon, we estimated the

current known supply to be sufficient to meet 74 percent of current

demand for preschool care in the entire area. However, in poor areas of

the county, known supply could be sufficient to meet only 44 percent of

demand, and this figure could drop to 38 percent in fiscal year 2002 under

welfare reform.

Low-Income Families

Face Other Issues in

Accessing Child Care

At all of our sites, CCR&R staff or state and local officials cited other issues

that low-income families face in accessing care, including the price of

care, the availability of nonstandard-hour care, transportation issues, and

quality of care.13

Price of Care Consumes

Large Percentage of Poor

Families’ Incomes

At the four sites we reviewed, the price of known child care consumed a

large percentage of household income for low-income families.14 As shown

in table 4, the median price of full-time infant care as a percentage of

median household income ranged from 16 to 43 percent for poor families.

The range for full-time care for preschool children was from 14 to

24 percent, and for school-aged children, from 8 to 18 percent.15 These

percentages do not take into account the possibility that some low-income

13In our general discussions with CCR&R staff and state and local officials about child care issues

affecting low-income families, we assumed low-income families to be those whose annual incomes

qualified them to receive child care subsidies, regardless of whether or not they received welfare.

Eligibility for child care subsidies differed in each state we visited.

14Technically, it is the parents’ share of the price of care that should be measured relative to household

income. However, our databases contained only the total price charged by the provider. These two

numbers will differ to the extent that child care is subsidized by a third party.

15For those providers that provided hourly rates instead of weekly ones, we assumed full-time care for

infants and preschoolers to be 45 hours per week and full-time care for school-aged children to be 25

hours per week.

Page 12 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

families may receive a child care subsidy.16 However, national survey data

for 1993, which include families with and without subsidies, also show that

low-income families who paid for care spent, on average, as much as

18 percent of their income on child care expenses.17

Table 4: Median Weekly Price for Known Child Care in Poor and Nonpoor Areas (Absolute Values and as a Percentage of

Sites’ Median Household Income)

Poor Nonpoor Poor Nonpoor

Center care Family day care

Price

% of median

income Price

% of median

income Price

% of median

income Price

% of median

income

Baltimore City

Infant $154 38 $147 22 $86 21 $86 13

Preschool 80-81 20 82-85 12-13 76 19 76 12

School-aged 43-75 10-18 45-81 7-12 50-75 12-19 50-75 8-11

Chicago

Infant 130-153 37-43 133-155 18-21 85 24 85 12

Preschool 81-84 23-24 80-81 11 65-80 18-23 70-80 10-11

School-aged 56 16 45 6 60 17 60 8

Benton County

Infant 121 23 109 13 90 17 90 11

Preschool 85 16 88 10 79 15 90 11

School-aged 43 8 32 4 44 8 50 6

Linn County

Infant 97 20 101 17 79 16 79 13

Preschool 69 14 73 12 68 14 70 11

School-aged 41 8 43 7 38 8 38 6

Note: We used 1990 U.S. Census data to calculate median household income for poor and

nonpoor areas. We used only those providers that reported a price in the CCR&R databases in

1996 to calculate the median weekly price of care.

The difference in the percentage of household income that the price of

known child care represents for poor and nonpoor families is almost

entirely due to differing median household incomes rather than

differences in the child care prices themselves. At our four sites, in most

cases, price differences between poor and nonpoor areas were small and

16Our previous work and that of others has shown that many eligible families do not receive child care

subsidies, mostly because of state funding constraints. See Child Care: Working Poor and Welfare

Recipients Face Service Gaps (GAO/HEHS-94-87, May 13, 1994).

17U.S. Bureau of the Census, What Does It Cost to Mind Our Preschoolers? Current Population

Reports, P70-52 (Washington, D.C.: U.S. Government Printing Office, 1995).

Page 13 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

generally less for homes than for centers.18 For example, the price of

center care for infants in poor areas of Chicago ranged from $130 to $153

and consumed between 37 and 43 percent of median household income for

poor families. The price range for infant care in nonpoor areas was $133 to

$155, but the percentage of median household income consumed was

between 18 and 21 percent for nonpoor families (see table 4).

CCR&R staff in Oregon and Chicago were surprised by the similarity in

prices of known care in poor and nonpoor areas. However, national data

show that, while many poor families may secure child care free of cost,

those poor families that do pay for care pay an amount not significantly

different from that paid by nonpoor families. Hence, “...poor families that

do pay for child care may compete against more financially able families

for child care services, and hence pay competitive prices for these

services.”19

Both CCR&R staff and state and local officials in the four cities and counties

said that the affordability of child care was a barrier for low-income

families in accessing child care. For example, Oregon CCR&R staff said that

money to buy child care, especially the more expensive infant care or care

for a child with special needs, is as much an issue for low-income families

as is building the supply of this type of care. They believe that if parents

had more money to purchase care, more providers would be willing to

offer it. Officials in Baltimore City and Chicago told us that the

affordability of child care for low-income families depends on the

subsidies they receive. In Chicago, both CCR&R staff and state officials told

us that subsidy rates are too low for some types of care and for

low-income parents who must compete with families who have more

resources to find care in economically mixed neighborhoods. Low

subsidies also contribute to high turnover for providers caring for

low-income children and create instability for both children and parents.

In Baltimore City, however, CCR&R staff believe that their subsidy rates

provide access to quality care for those families that receive them.

18With a few exceptions, these differences ranged from approximately $1 to $5 a week for centers and

from $0 to $3 per week for homes. However, in a few instances, price differences were larger between

the areas. For example, the median price for school-aged care in Chicago was $56 per week in poor

areas as compared with $45 per week in nonpoor areas, and the price of preschool family day care was

$79 in poor areas of Benton County and $90 in nonpoor areas.

19Bureau of the Census, Who’s Minding the Kids? Child Care Arrangements: Fall 1991, Survey of

Income and Program Participation (Washington, D.C.: U.S. Department of Commerce, 1994) p. 23.

Page 14 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Few Providers Offer

Nonstandard-Hour Care

Given their often limited education and low skill levels, many parents

moving from welfare to work may become employed in jobs with

nonstandard-hour work schedules, such as jobs that have rotating shift or

weekend hours, for example.20, 21 These types of jobs include cashier,

retail salesperson, and janitor. Finding child care during nonstandard work

hours may prove challenging, however. Our previous work examining the

use of child care under the JOBS program found that state and local

officials were having difficulty finding child care during nonstandard hours

for the children of AFDC parents participating in the JOBS program.22

At the four sites we reviewed, fewer providers offered nonstandard-hour

care as compared with other types of care: The percentage of providers

that offered nonstandard-hour care ranged from 12 percent to 35 percent.

Providers that offered nonstandard-hour care were predominantly family

child care homes, not centers, which have significantly greater capacity

than homes. Appendix II provides detailed data on the number and type of

providers offering this type of care by site.

Transportation Issues

Affect Accessibility of

Child Care

Transportation is another critical issue for welfare families in accessing

child care. As we previously reported, in a nationwide survey of local JOBS

program officials, 23 percent stated that they could not meet the child care

needs of all their participants, and 77 percent of these reported that this

was because of transportation problems. States reported that JOBS

participants did not have reliable private transportation to get their

children to child care providers and then to get themselves to work.

Moreover, some communities lacked the necessary public transportation

to get participants where they needed to go, especially in rural areas.23

CCR&R staff at all four of the sites reviewed also stated that lack of

transportation created barriers for low-income families in obtaining child

care. In addition to the transportation issues cited above, CCR&R staff in

Chicago and Oregon said that transportation of school-aged children

between school and their after-school provider was a problem.

20U.S. Congressional Research Service, Jobs for Welfare Recipients (Washington, D.C.: Library of

Congress, May 13, 1994), pp. 2-5.

21Presser, H., Jobs, Family, and Gender: Determinants of Nonstandard Work Schedules Among

Employed Americans in 1991 (College Park, Md.: Center of Population, Gender, and Social Inequality,

University of Maryland, 1995).

22GAO/HEHS-95-220, Sept. 21, 1995, p. 4.

23GAO/HEHS-95-220, Sept. 21, 1995, p. 9.

Page 15 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

States and CCR&Rs Have

Concerns About Child Care

Quality

Whether provided in centers or family child care homes, child care of

acceptable quality is care that nurtures children in a stimulating

environment, safe from harm. Research has documented that elements in a

child care setting that are associated with an acceptable level of quality

include trained providers, small group sizes, low child-to-staff ratios, and

low staff turnover, to name a few. Research over many years also has

documented the importance of the quality of care to all aspects of a child’s

healthy development—physical, cognitive, emotional, and social.

CCR&R staff and state and local officials at all four sites told us they were

concerned about the quality of care that low-income families are able to

access. For example, CCR&R staff in Oregon said that, given the numerous

constraints faced by low-income families, including low wages, less

flexible hours, and a lack of transportation, many low-income parents

have limited child care choices, which decreases their chances of finding

care of acceptable quality. In fact, one Oregon state official believes that

the supply of child care will be less of a critical issue under welfare reform

than the quality of the care parents access. In Baltimore City, CCR&R staff

and state and local officials were concerned about low-income families

not having access to care of acceptable quality unless they had access to

child care subsidies with which to purchase such care.24 Chicago CCR&R

staff expressed similar concerns and also said that the subsidy rates for

some types of care in Chicago are too low to purchase child care of an

acceptable level of quality.

Concluding

Observations

The availability of child care will be a key factor in the degree to which

states and the federal government succeed in helping welfare families

become more financially self-sufficient. On the basis of our review of four

sites, it seems likely that increases in the supply of child care will be

needed to meet the estimated increase in demand for care as welfare

reform is implemented. Questions remain, however, about which segments

of the child care market these increases will come from; how much care

will be needed; and whether or not states and localities can effectively

help increase the supply where it is most needed. The answers to these

questions, for our sites and other communities as well, depend on factors

such as the following:

24At the time of our review in Baltimore City, Maryland, CCR&R staff and state and local officials

stated that many families could not get child care subsidies because of a lack of state funds and were

on a waiting list. However, comments provided by CCR&R staff and Maryland state officials on our

draft report indicated that this situation had changed. More state and federal money has become

available for child care subsidies, and, as a result, Maryland has eliminated its waiting list for such

subsidies.

Page 16 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

Proportion of demand currently being met: If states’ current supply of

child care is sufficient to meet or exceed current demand, an increase in

demand over time may not be a problem. The growth in the supply of child

care experienced by an area may match the demand. However, if the

current supply of care is quite low relative to the demand, as our estimates

showed for infant care at our selected sites, and demand increases with

welfare reform, it is possible that the growth in total supply might not be

quick enough to meet the increase in the short term.

Ability of states to affect supply: While the supply of child care is expected

to grow in response to more demand, states and communities can, for the

most part, directly reach only those providers known to the states. With

the information available from these providers, the state can target them in

its supply-building activities, if needed. Such activities could include

providing incentives or subsidies, or making regulatory changes in an

effort to directly increase the supply overall or for a particular type of

care. The bigger challenge for states and localities will be increasing the

supply of care unknown to the states, such as that provided by friends,

neighbors, and especially relatives, which is chosen by many parents to

meet their child care needs. Information on these providers, however, is

limited.

Age of children needing care: The new federal law dramatically changes

which welfare parents are required to find work. Previously, that group

consisted of parents whose youngest child was 3 years old or older; now,

the work requirement applies to the entire welfare population, except for

parents with children 1 year old or younger. Young children are primarily

cared for in a provider’s home; a significant number of these providers are

relatives, particularly in low-income families. Hence, the increase in

demand for care for very young children caused by the new law could

place the greatest strain on the supply of family child care providers and

relative care. Information about family child care providers is limited

because many are unknown to the states; furthermore, their individual

capacity typically is limited. In addition, states and local governments

generally have little information available on relative care. States’ inability

to directly expand the capacity of these types of providers could pose

significant obstacles to communities in their efforts to ensure that their

child care supply meets the needs of their welfare parents.

Price of care: The price of child care can have a positive effect on building

supply, assuming that the amount parents are able and willing to pay is

high enough to attract more providers to the market. On the other hand,

Page 17 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

the higher the price of child care, the less affordable care becomes for

low-income families, especially for those without child care subsidies.

Data from our sites as well as national data show that child care,

especially infant care, consumes a high percentage of household income

for poor families. As a result, child care subsidies could become critical to

low-income families’ ability to afford care and, as officials in some of our

sites stated, buy quality care. However, the extent to which states have the

resources to provide subsidies to greater numbers of eligible families and

whether or not the amount of those subsidies will be high enough to build

supply are not known at this time.

The way in which these four factors interact in each market, and the

extent to which states and localities can influence these factors, will affect

the expansion of child care supply, which is important to welfare parents

who are making the transition to work.

Comments From HHS,

States, and CCR&Rs

and Our Evaluation

We obtained comments on a draft of this report from HHS and state and

CCR&R child care officials from the four areas reviewed in this report. HHS

officials said that the report’s findings reflect some of the child care issues

they have heard across the country, such as the gap between the supply of

and demand for infant and school-aged child care; the current inadequacy

of supply that states and communities face, particularly in low-income

areas; and the significant portion of a low-income family’s income that

child care consumes. HHS officials also noted that the report reinforces

earlier GAO work regarding difficulties that state and county administrators

have had in serving the child care needs of welfare parents participating in

the JOBS program. They also believe that the report is a useful next step in

identifying the crucial role child care plays in the lives of working families.

HHS’ written comments appear in full in appendix III.

Some CCR&Rs and state officials expressed several concerns related to our

not including unregulated child care in the scope of our review. First, by

excluding such care, they said, the report understates the importance and

significance of unregulated care in meeting the child care needs of welfare

recipients. The officials went on to say that caregivers such as relatives,

friends, and neighbors currently meet the needs of many parents,

particularly low-income parents, and that these providers will be an

important source of supply as demand grows in response to welfare

reform. Although our report focuses on known family child care homes

and centers, we recognize the important role that other types of care play

in meeting child care demand. The scope of our review was limited to

Page 18 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

known care only because of methodological constraints in attempting to

measure the total supply of care: As we state in the report, care both

known and unknown to the states will be important in filling the estimated

gap between known supply and future demand. In response to these

comments, we have revised the report to further acknowledge the

importance of other types of care.

Some CCR&Rs and state officials also believed that our estimates of future

demand for child care were based on an assumption that parents would

use only family child care homes or center care. In reality, our estimates of

future demand for care were based on the assumption that parents will use

all types of child care in the same proportions as they are currently using

them. Thus, we compared the supply of known family child care homes

and centers with only the demand for family child care homes and centers.

Finally, CCR&Rs and state officials believed that our discussion of the

quality of child care accessed by low-income populations suggested that

quality care is associated only with known care that is regulated. This was

not our intent. Our discussion represents comments made by CCR&R staff

and state and local officials in response to questions we asked to answer

the second review objective: to identify other challenges, besides possible

gaps between supply and demand, that low-income families face in

accessing child care. The challenges mentioned most often by these

officials included issues about child care quality and affordability, as well

as the availability of nonstandard-hour care and transportation, all of

which are discussed in the latter part of the report.

HHS, the states, and CCR&Rs also provided technical comments, which we

addressed in the report, as appropriate.

As agreed with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 7 days from the

date of this letter. At that time, we will send copies of this report to the

Secretary of Health and Human Services; the Chairmen and Ranking

Minority Members of the House Committees on Ways and Means and

Education and the Workforce; and the Chairmen and Ranking Minority

Members of the Senate Committees on Finance and Labor and Human

Resources. We will also make copies available to others on request.

Page 19 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
B-270237 

If you or your staff have any questions about this report, please contact me

on (202) 512-7125. Other staff who contributed to this report are listed in

appendix IV.

Sincerely yours,

Mark V. Nadel

Associate Director

Income Security Issues

Page 20 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Page 21 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Contents

Letter 1

Appendix I 

Scope and

Methodology

26

Supply Data 26

Demand Data 28

Estimating Percentage of Demand That Could Be Met by Supply

of Known Child Care

30

Estimating New Demand Under Welfare Work Requirements 30

Estimating Poor and Nonpoor Supply of Known Care 31

Estimating Poor and Nonpoor Demand for Care 32

Appendix II 

Child Care at Four

Sites We Reviewed

34

Baltimore City, Maryland 34

Chicago, Illinois 36

Benton County, Oregon 38

Linn County, Oregon 40

Appendix III 

Comments From the

Department of Health

and Human Services

44

Appendix IV 

GAO Contacts and

Staff

Acknowledgments

47

Related GAO Products 48

Tables Table 1: Estimates of the Percentage of Child Care Demand That

Could Be Met by Currently Known Supply for Various Age

Groups, 1996-2002

9

Table 2: Estimated Gaps Between Known Supply and Demand for

Child Care for Various Age Groups, 1996-2002

10

Table 3: Estimates of the Percentage of Child Care Demand That

Could Be Met by Currently Known Supply for Poor and Nonpoor

Areas, 1996-2002

11

Page 22 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Contents

Table 4: Median Weekly Price for Known Child Care in Poor and

Nonpoor Areas

13

Table II.1: Total Known Providers by Type of Setting in Poor and

Nonpoor Areas, Baltimore City

34

 Table II.2: Total Known Providers by Age Group in Poor and

Nonpoor Areas, Baltimore City

34

Table II.3: Percentage of Known Providers That Offer Care

During Nonstandard Hours in Poor and Nonpoor Areas,

Baltimore City

34

Table II.4: Percentage of Known Providers That Currently

Provide Special Needs Care in Poor and Nonpoor Areas,

Baltimore City

35

Table II.5: Total Known Provider Spaces by Type of Setting in

Poor and Nonpoor Areas, Baltimore City

35

Table II.6: Known Spaces for Infants by Type of Setting in Poor

and Nonpoor Areas, Baltimore City

35

Table II.7: Known Spaces for Preschool Children by Type of

Setting in Poor and Nonpoor Areas, Baltimore City

35

Table II.8: Known Spaces for School-Aged Children by Type of

Setting in Poor and Nonpoor Areas, Baltimore City

36

Table II.9: Total Known Providers by Type of Setting in Poor and

Nonpoor Areas, Chicago

36

Table II.10: Total Known Providers by Age Group in Poor and

Nonpoor Areas, Chicago

37

Table II.11: Percentage of Known Providers That Offer Care

During Nonstandard Hours in Poor and Nonpoor Areas, Chicago

37

Table II.12: Percentage of Known Providers That Have Had

Experience Caring for Children With Special Needs in Poor and

Nonpoor Areas, Chicago

37

Table II.13: Total Known Provider Spaces by Type of Setting in

Poor and Nonpoor Areas, Chicago

37

Table II.14: Known Spaces for Infants by Type of Setting in Poor

and Nonpoor Areas, Chicago

38

 Table II.15: Known Spaces for Preschool Children by Type of

Setting in Poor and Nonpoor Areas, Chicago

38

Table II.16: Known Spaces for School-Aged Children by Type of

Setting in Poor and Nonpoor Areas, Chicago

38

Table II.17: Total Known Providers by Type of Setting in Poor and

Nonpoor Areas, Benton County

39

 Table II.18: Total Known Providers by Age Group in Poor and

Nonpoor Areas, Benton County

39

Page 23 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Contents

Table II.19: Percentage of Known Providers That Offer Care

During Nonstandard Hours in Poor and Nonpoor Areas, Benton

County

39

Table II.20: Total Known Provider Spaces by Type of Setting in

Poor and Nonpoor Areas, Benton County

39

Table II.21: Known Spaces for Infants by Type of Setting in Poor

and Nonpoor Areas, Benton County

40

Table II.22: Known Spaces for Preschool Children by Type of

Setting in Poor and Nonpoor Areas, Benton County

40

Table II.23: Known Spaces for School-Aged Children by Type of

Setting in Poor and Nonpoor Areas, Benton County

40

Table II.24: Total Known Providers by Type of Setting in Poor and

Nonpoor Areas, Linn County

41

 Table II.25: Total Known Providers by Age Group in Poor and

Nonpoor Areas, Linn County

41

Table II.26: Percentage of Known Providers That Offer Care

During Nonstandard Hours in Poor and Nonpoor Areas, Linn

County

41

Table II.27: Total Known Provider Spaces by Type of Setting in

Poor and Nonpoor Areas, Linn County

42

Table II.28: Known Spaces for Infants by Type of Setting in Poor

and Nonpoor Areas, Linn County

42

Table II.29: Known Spaces for Preschool Children by Type of

Setting in Poor and Nonpoor Areas, Linn County

42

Table II.30: Known Spaces for School-Aged Children by Type of

Setting in Poor and Nonpoor Areas, Linn County

43

Abbreviations

AFDC Aid to Families With Dependent Children

BLS Bureau of Labor Statistics

CCDBG Child Care Development Block Grant

CCR&R child care resource and referral agencies

CPS Current Population Survey

FSA Family Support Act

HHS Department of Health and Human Services

JOBS Job Opportunities and Basic Skills Training

NCCS National Child Care Survey

SIPP Survey on Income and Program Participation

Page 24 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Page 25 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

This appendix provides more detail about the methods we used to arrive

at our estimates of the supply of and demand for child care at our four

sites. Our measurement of the gap between the current known supply and

current, as well as future, demand for family child care homes and centers

is based on a static model of an inherently dynamic process. As the

demand for child care increases, economic theory would predict that over

time the supply of care will increase as well, until the two are once again

in equilibrium.25 Our model provides a snapshot of a point in time at which

demand has increased but supply has not yet moved to meet it. Thus, we

are able to identify, for these four sites, the amount of specific types of

known child care and where it is located, and to predict where care will be

needed in the future.

We performed our work between April and December 1996 in accordance

with generally accepted government auditing standards. We did not

independently verify the child care supply data provided by the child care

resource and referral agencies (CCR&R).

Supply Data The starting point for our work was the databases provided by the three

CCR&Rs for the four sites reviewed: Baltimore City, Maryland; Chicago,

Illinois; and Benton and Linn counties, Oregon.26 We used site-specific

supply data instead of nationwide data because local supply data were

more readily available, current, and comprehensive, thus improving the

accuracy of our estimates. Additionally, site-specific supply data were

needed to be able to examine supply differences between poor and

nonpoor areas.27

25Economic theory also would predict that if the child care supply curve was upward sloping, the price

of care would rise as the demand for care increased. This would make measuring the gap between

supply and demand even more difficult, since we would also have to take into account changing

prices. Our model of the child care market assumes that the long-run supply curve for child care is

essentially horizontal; that is, the price of care does not increase with an increase in demand. While

this assumption might be unusual for more standard commodities, it is a fair description of the

behavior of the child care market in recent years. While the demand for child care has increased

dramatically, the price of care, adjusted for inflation, has remained approximately the same.

26The Child Care Bureau at the Administration for Children and Families, U.S. Department of Health

and Human Services (HHS), and the National Association of Child Care Resource and Referral

Agencies helped identify a potential list of sites.

27Child care supply data for Baltimore City were provided by the Maryland Committee for Children,

Inc., a private, nonprofit, community organization. Its database contains information on regulated child

care and early education programs throughout Maryland, the District of Columbia, and Northern

Virginia. Data for Benton and Linn counties, Oregon, were provided by Family Connections, a CCR&R

located at Linn and Benton County Community College. Chicago data were provided by the Day Care

Action Council, Chicago, Illinois. All three CCR&Rs are members of the Child Care Research

Partnerships funded by the Child Care Bureau in HHS.

Page 26 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

Identifying and Classifying

Providers

The CCR&Rs’ databases included a wealth of information about currently

active known child care providers in their service delivery areas, including

their hours of operation, the ages of children that they care for, and the

fees that they charge. We first designated each child care provider in each

database as either a center or a family day care provider. From the original

classifications provided by the CCR&Rs, our definition of center care

included a broad and diverse range of full- and part-time programs, such as

Head Start and Maryland’s Extended Elementary Education Program; our

definition of family day care included both family day care and group

homes.28 Providers that did not fall into one of these categories, such as

summer camps and providers of care during vacation time only, were

excluded from our analysis. In addition, we excluded parental care,

relative care, and care provided in the child’s own home.

We further identified each provider in each database by the ages and

number of children it was willing or licensed to care for. We grouped

children into three age categories: infants, birth to 23 months; preschool,

aged 24 to 71 months; and school-aged, aged 6 through 12 years. We also

identified those providers that were qualified to care for children with

special needs and those who were willing to care for children during

nonstandard work hours, such as on the weekend, or before 6 a.m. and

after 6:30 p.m.

Determining Child Care

Capacity

The CCR&R databases varied, across sites and types of providers, with

respect to the information they contained on the capacity of each child

care provider.29 Capacity data by each age group were available at all four

sites for center-based care. However, such data for family child care were

not always available from each site. In Chicago, capacity data for each age

group were available for family child care. However, in Baltimore City,

only data on total capacity and infant capacity were available separately

for family child care. After subtracting the infant capacity from the total

capacity, we had to estimate preschool and school-aged capacities from

the remainder using a formula we developed. This formula was based on

the assumption that the ratio of preschool to school-aged children varied

slightly depending on the number of infants who were receiving care in the

28Group homes were defined as family day care homes that are licensed to care for between 10 and 12

children.

29At all four sites, center capacity is the maximum number of children allowed at the center by the

state. This same definition of capacity is used for family child care homes for Chicago and Baltimore

City. For family child care homes in Benton and Linn counties, capacity is the number of children the

provider is willing to accept, within the legal limit.

Page 27 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

home.30 In Benton and Linn counties in Oregon, data for home-based care

were available only on total capacity. Because we didn’t have any

information specifically on infant capacity for each provider in these

counties, we assumed that every provider that accepted infants had a

maximum infant capacity of 1. We then subtracted this estimated infant

capacity from the total capacity and applied the same formulas used on

the Baltimore City data to the remainder to estimate preschool and

school-aged capacities.

Demand Data To estimate total demand for family child care homes and centers at our

four sites, we needed to know the number of children through age 12, the

percentage of those children with working mothers, and the percentage of

children who used either center care or family day care. We therefore used

data from a number of different sources, including the 1990 U.S. Census, a

1994 update to the Census, the 1995 Current Population Survey (CPS), as

well as two surveys of child care usage—the Survey on Income and

Program Participation (SIPP) and the National Child Care Survey (NCCS).

Because these surveys do not identify whether parents are using care that

is known or unknown to the states, we had to estimate total demand for

center and family day care.

Estimating Number of

Children Aged 12 and

Under

Our estimate of demand for care starts with data from the 1994 update to

the U.S. Census on the number of children aged 12 and under living at

each of our four sites, reported by single year of age. We also collected

age-specific data from the local welfare offices at each of our four sites on

the number of children aged 12 and under who were on the welfare rolls in

1995 or 1996. We then subtracted these welfare numbers from the 1994

population numbers to create an estimate of the number of nonwelfare

children by single year of age in each site.

Estimating Number of

Children With Working

Mothers and Nonworking

Mothers

The 1995 CPS provided the percentage of children, at each age, with

working and nonworking mothers in each state. We then applied these

state-specific percentages to the number of nonwelfare children

determined above, to project numbers of nonwelfare children, at each age,

with working and nonworking mothers at each site. Because of

methodological constraints, the children on the welfare rolls were all

30We developed the following formula on the basis of discussions with CCR&R officials about the

average capacity by age among their provider populations. If infant capacity was 2, the preschool to

school-aged ratio was .66/.33; if infant capacity was 1, the ratio was .71/.29; if infant capacity was 0, the

ratio was .75/.25.

Page 28 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

assumed to have nonworking mothers, although we recognize that some

mothers on welfare also work. We added the number of children on

welfare to the estimate of children of nonwelfare, nonworking mothers to

arrive at an estimate of total number of children with nonworking

mothers.

Estimating Percentage of

Children Using Centers

and Family Day Care

We based our estimates of the percentage of children at each age using

center care or family day care, respectively, on two different national

surveys. We used the 1993 SIPP data to determine the percentage of

children from birth to age 4 using center care and the percentage using

family day care. Because the SIPP data had been collected only for working

mothers, we had to estimate a usage rate for the children of nonworking

mothers as well. To do this, we used 1990 NCCS data, which included both

working and nonworking mothers in the sample, to create a ratio of the

child care usage rates of children of nonworking mothers to those of

working mothers, at each age from birth through 12, for center and family

day care separately. We multiplied these ratios by the usage rates for

children of working mothers from the SIPP to impute usage rates for

children of nonworking mothers in 1993.

Because of a design flaw in the questionnaire, the 1993 SIPP data seriously

underestimate child care usage rates of school-aged children.31 Therefore,

we used the 1990 NCCS data to determine the percentage of children aged 5

through 12, with working and nonworking mothers, who used center care

and family day care. To compensate for the difference in child care use

patterns between 1989-90 and 1993, we applied an adjustment factor to the

NCCS data equal to the percentage change in the estimates of center care

and family day care use between 1988 and 1993 SIPP data to inflate these

1990 figures to what they would have been in 1993.32

Estimating Numbers of

Children Using Centers

and Family Day Care

We then multiplied our estimates of the percentages of children using each

type of child care, at each age, by the estimated number of children at each

age at each site to yield an estimate of the number of children, at each age,

31Census Bureau analysts reported that the SIPP child care questionnaire has since been revised to

better capture the child care usage of school-aged children.

32Before 1993, the SIPP data were collected in 1988 and then again in 1991. The NCCS data were

collected in 1989-90. We determined that it was better to use the 1988 SIPP and possibly overestimate

the change in usage rates, rather than use the 1991 data and run the risk of underestimating the

change.

Page 29 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

expected to be in each type of care. This is our estimated demand for child

care.33

Estimating Percentage

of Demand That

Could Be Met by

Supply of Known

Child Care

Having developed estimates of the supply of known family child care

homes and centers at our four sites and the demand for these types of

care, our final step was to compare, for each age category, the estimated

number of child care spaces available and the estimated number of

children requiring each type of care for each site. The difference between

these two estimates is defined as the gap between the current supply of

known family child care homes and centers and the total demand for these

types of care at each site. The ratio of the number of spaces available to

the number of spaces demanded is defined as the estimated percentage of

demand for center and family child care that could be met by the

estimated current supply of known care. We calculated this percentage for

child care overall, as well as for age-specific child care, at each site.

Estimating New

Demand Under

Welfare Work

Requirements

To project the possible new demand created as a result of welfare reform,

we assumed that the percentage of children currently on the welfare rolls

who would need child care under welfare reform would be equal to the

percentage of mothers moving from welfare to the workforce. At every

age, we estimated that 25 percent, 35 percent, or 50 percent of the children

would need child care because their mothers were now required to work

or participate in work-related activities. These percentages are based on

the work requirements of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 for 1997, 1999, and 2002 .

We then compared these estimates of the demand for child care after the

welfare reform work requirements go into effect with the previously

estimated supply of known child care at each site. We made these

comparisons for age-specific categories of child care as well as for child

care as a whole. These comparisons did not take into account the natural

increase in the supply of care that an increase in demand would eventually

engender. Our estimate of how capable the current supply of known child

care would be of meeting the expected increased demand was intended to

illustrate how much the supply of known child care would have to grow to

maintain or even increase the percentage of demand that it currently is

capable of meeting.

33Because of data limitations, our calculations underestimate the number of nonwelfare mothers who

are working and overestimate the number who are not working. At the same time, our calculations

overestimate the number of welfare mothers who are not working by assuming that all welfare

mothers do not work.

Page 30 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

Estimating Poor and

Nonpoor Supply of

Known Care

Because the increase in demand for child care resulting from welfare

reform is expected to come primarily from poor parents, the location of

the current supply of child care is a relevant issue. While child care

markets are not completely segregated so that poor parents purchase care

only within poor areas and nonpoor parents within nonpoor areas, most

parents prefer to use providers who are close to home. Further analysis of

the total child care demand and supply of known child care at our four

sites involved separating each site into poor and nonpoor areas.

Determining Census Tracts To categorize providers as being located in either poor or nonpoor areas at

each site, we needed to know the census tract number for the location or

residence of each provider. Baltimore City’s CCR&R included the census

tract number for each provider in its database. The databases for both the

Chicago and Oregon CCR&Rs, however, included only the name of the

school nearest the location or residence of each provider. For Chicago and

the two Oregon counties, we therefore used the Tiger/Census Tract Street

Index34 to determine the census tract number for the school closest to the

provider and assigned that census tract to the provider. In cases in which

Chicago providers had not given accurate school information, the CCR&R

released the actual addresses of the providers to us. With this information,

we were able to determine and assign to each a census tract number.

Designating Poor and

Nonpoor Census Tracts

We analyzed the census tracts within each site by their median household

income. In some cases, we also looked at the percentage of households on

welfare in each tract.35 Each census tract was then designated as either

poor or nonpoor. The criteria for this designation varied somewhat by site,

especially with respect to the percentage of households on welfare in each

tract. In general, those census tracts with a median household income at

or below $27,750 (slightly over 200 percent of the federal poverty level for

a family of four in 1995) were defined as being in poor areas, and those

with median household income above $27,750 were defined as being in

nonpoor areas. This criterion was sometimes overridden, however, when

examined in conjunction with the criterion on percentage of households

on welfare.

34The Tiger/Census Tract Street Index is a CD-ROM database that matches addresses with census tract

numbers.

35These data came from the 1990 U.S Census.

Page 31 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

Estimating Poor and

Nonpoor Demand for

Care

Determining Percentage of

Children in Poor and

Nonpoor Areas

We used 1990 Census data by census tract for each of the four sites to

estimate the percentages of children from birth through age 12 who were

living in poor and nonpoor areas in each site.

Determining Percentage of

Children With Working and

Nonworking Mothers in

Poor and Nonpoor Areas

The 1995 CPS provided the percentage of poor and nonpoor children with

working and nonworking mothers in each state. We then applied these

state-specific percentages to the numbers of poor and nonpoor nonwelfare

children for each site to project numbers of nonwelfare children with

working and nonworking mothers separately for poor and nonpoor areas

of each site. We then included the number of children on the welfare rolls

in the estimate of children in poor areas with nonworking mothers.

No Difference in Child

Care Usage Rates Assumed

for Poor and Nonpoor

Areas

Because of data limitations, we estimated that for each child care setting

the usage rates of poor children are the same as those of nonpoor

children. This is a shortcoming of our methodology, however, because

poor and nonpoor parents use different types of child care at different

rates. In particular, lower-income parents are more likely to use relative

care, which is either free or much lower in price than market care (center

care and family day care). However, one outcome of welfare reform may

be a decrease in the availability of free relative care for this population,

since more people, including perhaps those caregiving relatives, will be

required to work. In addition, while in the past the increase in demand for

child care has not affected its long-term price, another short-term effect of

the increase in demand for care attributable to welfare reform may be to

drive up the price of care for all parents, but for low-income parents in

particular. Both of these possibilities may result in poor parents using

more market care than they have in the past.

Estimating Numbers of

Poor and Nonpoor

Children Using Centers

and Family Day Care

We then multiplied our estimates of the percentages of children using each

type of child care at each age by the estimated number of poor and

nonpoor children at each age at each site to yield an estimate of the

number of poor and nonpoor children, at each age, expected to demand

each type of care.

Page 32 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix I 

Scope and Methodology

Estimating Percentage of

Current and Projected

Demand That Could Be

Met by Current Known

Supply in Poor and

Nonpoor Areas

We compared the estimated number of known child care spaces available

within each age category and the estimated number of children currently

demanding each type of care in each age category for each site. This was

done separately for poor and nonpoor areas. In addition, we estimated the

new demand for child care in the poor areas that is likely to be caused by

the move of more mothers from welfare to work using the same rates of

labor force participation we assumed above.

Calculating Median Weekly

Price of Child Care by Age

of Child for Each Site

To calculate the median weekly price of child care, we again divided each

site-specific database according to the type of provider (family day care or

center care) and the age category of children each provider served (infant,

preschool, or school-aged). Where possible, we identified a full-time

weekly price of care for each provider in each age/type category. When a

full-time weekly price was not available, we estimated it using the given

part-time hourly rate and a standard number of hours for full-time care of

45 hours for infants and preschoolers and 25 hours for school-aged

children. If no price information was available for a specific provider, we

dropped it from the sample when calculating the median weekly price.

Thus, a median weekly price was calculated for each age category and

type of child care setting, for the total number of child care providers that

provided price information, and for each site.

Page 33 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Baltimore City,

Maryland

Baltimore City has over 700,000 residents and ranks thirteenth among U.S.

cities in population. According to the Bureau of Labor Statistics (BLS),

5.5 percent of Baltimore City’s labor force was unemployed in

September 1996. While 15 percent of the state’s population lives in

Baltimore City, about 47 percent of the state’s Aid to Families With

Dependent Children (AFDC) caseload, or about 88,000 participants, resides

there. Of the city’s AFDC caseload, about 64 percent, or 56,554, is children

12 and under. These children represent 41 percent of the total population

of children 12 and under, about 137,000, living in Baltimore City.36

Table II.1: Total Known Providers by

Type of Setting in Poor and Nonpoor

Areas, Baltimore City

Center providers Family providers Total providers

Number Percentage Number Percentage Number Percentage

Poor

areas 184 52 654 54 838 54

Nonpoor

areas 171 48 557 46 728 46

Total 355 100 1,211 100 1,566 100

Note: Percentages are rounded to the nearest whole number. Centers include those providers

classified as center care, a group program, or an Extended Elementary Education Program.

Table II.2: Total Known Providers by

Age Group in Poor and Nonpoor

Areas, Baltimore City

Infant providers Preschool providers School-aged providers

Number Percentage Number Percentage Number Percentage

Poor

areas 552 53 733 53 629 54

Nonpoor

areas 489 47 647 47 529 46

Total 1,041 100 1,380 100 1,158 100

Note: Percentages are rounded to the nearest whole number.

Table II.3: Percentage of Known

Providers That Offer Care During

Nonstandard Hours in Poor and

Nonpoor Areas, Baltimore City

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Nonstandard hours 101 12 94 13

Total 838 100 728 100

Note: Percentages are rounded to the nearest whole number.

36The source years for these data and those in the tables that follow ranged from 1994 to 1996;

comparable data for a common point in time were unavailable. These data are presented to provide a

general overview of the economic environment and welfare population of the city.

Page 34 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.4: Percentage of Known

Providers That Currently Provide

Special Needs Care in Poor and

Nonpoor Areas, Baltimore City

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Special needs 109 13 90 12

Total 838 100 728 100

Note: Percentages are rounded to the nearest whole number.

Table II.5: Total Known Provider

Spaces by Type of Setting in Poor and

Nonpoor Areas, Baltimore City

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 7,779 50 4,009 53 11,788 51

Nonpoor

areas 7,626 50 3,587 47 11,213 49

Total 15,405 100 7,596 100 23,001 100

Note: Percentages are rounded to the nearest whole number. Centers include those providers

classified as center care, a group program, or an Extended Elementary Education Program.

Family spaces in Baltimore City were estimated. See app. I for the details of our methodology.

Table II.6: Known Spaces for Infants by

Type of Setting in Poor and Nonpoor

Areas, Baltimore City

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 110 50 935 52 1,045 52

Nonpoor

areas 108 50 849 48 957 48

Total 218 100 1,784 100 2,002 100

Note: Percentages are rounded to the nearest whole number. Centers include those providers

classified as center care, a group program, or an Extended Elementary Education Program.

Table II.7: Known Spaces for

Preschool Children by Type of Setting

in Poor and Nonpoor Areas, Baltimore

City

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 5,877 53 2,121 53 7,998 53

Nonpoor

areas 5,231 47 1,884 47 7,115 47

Total 11,108 100 4,005 100 15,113 100

Note: Percentages are rounded to the nearest whole number. Centers include those providers

classified as center care, a group program, or an Extended Elementary Education Program.

Page 35 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.8: Known Spaces for

School-Aged Children by Type of

Setting in Poor and Nonpoor Areas,

Baltimore City

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 1,792 44 953 53 2,745 47

Nonpoor

areas 2,287 56 854 47 3,141 53

Total 4,079 100 1,807 100 5,886 100

Note: Percentages are rounded to the nearest whole number. Centers include those providers

classified as center care, a group program, or an Extended Elementary Education Program.

Chicago, Illinois Chicago has about 2.8 million residents and ranks third among U.S. cities

in population. According to BLS, 4.8 percent of Chicago’s labor force was

unemployed in September 1996. While only 24 percent of the state’s

population lives in Chicago, about 55 percent of the state’s AFDC caseload,

or 351,000 participants, resides there. Of the city’s AFDC caseload, about

60 percent, or 219,489, is children 12 and under. These children represent

about 40 percent of the total population of children, about 561,000, living

in Chicago.37

Table II.9: Total Known Providers by

Type of Setting in Poor and Nonpoor

Areas, Chicago

Center providers Family providers Total providers

Number Percentage Number Percentage Number Percentage

Poor

areas 432 56 405 39 837 46

Nonpoor

areas 343 44 624 61 967 54

Total 775 100 1,029 100 1,804 100

Note: Percentages are rounded to the nearest whole number.

37The source years for these data and those in the tables that follow ranged from 1992 to 1996;

comparable data for a common point in time were unavailable. These data are presented to provide a

general overview of the economic environment and welfare population of the city.

Page 36 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.10: Total Known Providers by

Age Group in Poor and Nonpoor

Areas, Chicago

Infant providers Preschool providers School-aged providers

Number Percentage Number Percentage Number Percentage

Poor

areas 382 39 801 46 390 41

Nonpoor

areas 608 61 940 54 569 59

Total 990 100 1,741 100 959 100

Note: Percentages are rounded to the nearest whole number.

Table II.11: Percentage of Known

Providers That Offer Care During

Nonstandard Hours in Poor and

Nonpoor Areas, Chicago

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Nonstandard hours 167 20 225 23

Total 837 100 967 100

Note: Percentages are rounded to the nearest whole number.

Table II.12: Percentage of Known

Providers That Have Had Experience

Caring for Children With Special Needs

in Poor and Nonpoor Areas, Chicago

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Special needs 419 50 371 38

Total 837 100 967 100

Note: Percentages are rounded to the nearest whole number.

Table II.13: Total Known Provider

Spaces by Type of Setting in Poor and

Nonpoor Areas, Chicago

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 25,529 57 2,645 37 28,174 54

Nonpoor

areas 19,107 43 4,417 63 23,524 46

Total 44,636 100 7,062 100 51,698 100

Note: Percentages are rounded to the nearest whole number.

Page 37 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.14: Known Spaces for Infants

by Type of Setting in Poor and

Nonpoor Areas, Chicago

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 218 28 927 38 1,145 35

Nonpoor

areas 562 72 1,519 62 2,081 65

Total 780 100 2,446 100 3,226 100

Note: Percentages are rounded to the nearest whole number.

Table II.15: Known Spaces for

Preschool Children by Type of Setting

in Poor and Nonpoor Areas, Chicago

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 20,294 55 1,537 38 21,831 54

Nonpoor

areas 16,311 45 2,528 62 18,839 46

Total 36,605 100 4,065 100 40,670 100

Note: Percentages are rounded to the nearest whole number.

Table II.16: Known Spaces for

School-Aged Children by Type of

Setting in Poor and Nonpoor Areas,

Chicago

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 5,017 69 181 33 5,198 67

Nonpoor

areas 2,234 31 370 67 2,604 33

Total 7,251 100 551 100 7,802 100

Note: Percentages are rounded to the nearest whole number.

Benton County,

Oregon

Benton County has about 75,500 residents or about 2 percent of the state’s

population. In September 1996, 2.4 percent of Benton County’s labor force

was unemployed. About 3 percent, or 3,153, of the state’s AFDC population

resides in Benton County. Of the county’s AFDC caseload, about 46 percent

is children 12 and under. These 1,446 children represent about 12 percent

of the total population, about 11,909, of children living in Benton County.38

38The source years for these data and those in the tables that follow ranged from 1994 to 1996;

comparable data for a common point in time were unavailable. These data are presented to provide a

general overview of the economic environment and welfare population of the county.

Page 38 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.17: Total Known Providers by

Type of Setting in Poor and Nonpoor

Areas, Benton County

Center providers Family providers Total providers

Number Percentage Number Percentage Number Percentage

Poor

areas 10 32 54 36 64 35

Nonpoor

areas 21 68 96 64 117 65

Total 31 100 150 100 181 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.18: Total Known Providers by

Age Group in Poor and Nonpoor

Areas, Benton County

Infant providers Preschool providers School-aged providers

Number Percentage Number Percentage Number Percentage

Poor

areas 46 35 60 37 48 33

Nonpoor

areas 84 65 104 63 99 67

Total 130 100 164 100 147 100

Note: Percentages are rounded to the nearest whole number.

Table II.19: Percentage of Known

Providers That Offer Care During

Nonstandard Hours in Poor and

Nonpoor Areas, Benton County

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Nonstandard hour 12 19 15 13

Total 64 100 117 100

Note: Percentages are rounded to the nearest whole number.

Table II.20: Total Known Provider

Spaces by Type of Setting in Poor and

Nonpoor Areas, Benton County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 458 33 301 38 759 35

Nonpoor

areas 918 67 499 62 1,417 65

Total 1,376 100 800 100 2,176 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Page 39 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.21: Known Spaces for Infants

by Type of Setting in Poor and

Nonpoor Areas, Benton County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 80 44 42 34 122 40

Nonpoor

areas 100 56 81 66 181 60

Total 180 100 123 100 303 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.22: Known Spaces for

Preschool Children by Type of Setting

in Poor and Nonpoor Areas, Benton

County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 207 34 227 39 434 36

Nonpoor

areas 403 66 357 61 760 64

Total 610 100 584 100 1,194 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.23: Known Spaces for

School-Aged Children by Type of

Setting in Poor and Nonpoor Areas,

Benton County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 171 29 32 34 203 30

Nonpoor

areas 415 71 62 66 477 70

Total 586 100 94 100 680 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Linn County, Oregon Linn County has more than 98,000 residents. As of September 1996,

5.5 percent of Linn County’s labor force was unemployed. While only

3 percent of the state’s population lives in Linn County, about 7 percent of

state’s AFDC caseload, about 7,800, resides there. Of the county’s recipients,

almost half are children 12 and under. These children represent about

Page 40 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

20 percent of the total population of children, 18,417, living in Linn

County.39

Table II.24: Total Known Providers by

Type of Setting in Poor and Nonpoor

Areas, Linn County

Center providers Family providers Total providers

Number Percentage Number Percentage Number Percentage

Poor

areas 5 25 114 43 119 42

Nonpoor

areas 15 75 150 57 165 58

Total 20 100 264 100 284 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.25: Total Known Providers by

Age Group in Poor and Nonpoor

Areas, Linn County

Infant providers Preschool providers School-aged providers

Number Percentage Number Percentage Number Percentage

Poor

areas 94 42 113 42 112 44

Nonpoor

areas 131 58 158 58 140 56

Total 225 100 271 100 252 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.26: Percentage of Known

Providers That Offer Care During

Nonstandard Hours in Poor and

Nonpoor Areas, Linn County

Providers in poor areas

Providers in nonpoor

areas

Number Percentage Number Percentage

Nonstandard hour 49 41 53 32

Total 119 100 165 100

Note: Percentages are rounded to the nearest whole number.

39The source years for these data and those in the tables that follow ranged from 1994 to 1996;

comparable data for a common point in time were unavailable. These data are presented to provide a

general overview of the economic environment and welfare population of the county.

Page 41 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.27: Total Known Provider

Spaces by Type of Setting in Poor and

Nonpoor Areas, Linn County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 235 27 638 44 873 37

Nonpoor

areas 649 73 822 56 1,471 63

Total 884 100 1,460 100 2,344 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.28: Known Spaces for Infants

by Type of Setting in Poor and

Nonpoor Areas, Linn County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 20 25 92 42 112 37

Nonpoor

areas 60 75 129 58 189 63

Total 80 100 221 100 301 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Table II.29: Known Spaces for

Preschool Children by Type of Setting

in Poor and Nonpoor Areas, Linn

County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 71 19 438 44 509 37

Nonpoor

areas 298 81 553 56 851 63

Total 369 100 991 100 1,360 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Page 42 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix II 

Child Care at Four Sites We Reviewed

Table II.30: Known Spaces for

School-Aged Children by Type of

Setting in Poor and Nonpoor Areas,

Linn County

Center providers Family providers Total providers

Spaces Percentage Spaces Percentage Spaces Percentage

Poor

areas 144 33 108 44 252 37

Nonpoor

areas 291 67 140 56 431 63

Total 435 100 248 100 683 100

Note: Percentages are rounded to the nearest whole number. Family child care includes group

homes.

Page 43 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix III 

Comments From the Department of Health

and Human Services

Page 44 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix III 

Comments From the Department of Health

and Human Services

Now on pp. 8-10.

Now on pp. 10-12.

Now on pp. 12-14.

Page 45 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix III 

Comments From the Department of Health

and Human Services

Page 46 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Appendix IV 

GAO Contacts and Staff Acknowledgments

GAO Contacts David P. Bixler, Assistant Director, (202) 512-7201

Janet L. Mascia, Evaluator-in-Charge, (202) 512-7263

Acknowledgments In addition to those named above, the following individuals made

important contributions to this report: Alicia Puente Cackley, Suzanne

Sterling, and Rodina Tungol assisted in designing the job, conducting

interviews, analyzing data, and writing the report; James Wright and Joel

Grossman provided design support; Joan Vogel and Bob DeRoy conducted

computer programming; and Steve Machlin provided statistical advice

regarding our data analysis.

Page 47 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Related GAO Products

Early Childhood Programs: Multiple Programs and Overlapping Target

Groups (GAO/HEHS-95-4FS, Oct. 31, 1995).

Welfare to Work: Child Care Assistance Limited; Welfare Reform May

Expand Needs (GAO/HEHS-95-220, Sept. 21, 1995).

Early Childhood Programs: Many Poor Children and Strained Resources

Challenge Head Start (GAO/HEHS-94-169BR, May 17, 1995).

Early Childhood Centers: Services to Prepare Children for School Often

Limited (GAO/HEHS-95-21, Mar. 21, 1995).

Child Care: Child Care Subsidies Increase Likelihood That Low-Income

Mothers Will Work (GAO/HEHS-95-20, Dec. 30, 1994).

Child Care: Promoting Quality in Family Child Care (GAO/HEHS-95-93, Dec. 9,

1994).

Child Care: Working Poor and Welfare Recipients Face Service Gaps

(GAO/HEHS-94-87, May 13, 1994).

Infants and Toddlers: Dramatic Increases in Numbers Living in Poverty

(GAO/HEHS-94-74, Apr. 7, 1994).

School-age Demographics: Recent Trends Pose New Educational

Challenges (GAO/HRD-93-105BR, Aug. 5, 1993).

Poor Preschool-aged Children: Numbers Increase but Most Not in

Preschool (GAO/HRD-93-111BR, July 21, 1993).

Child Care: States Face Difficulties Enforcing Standards and Promoting

Quality (GAO/HRD-93-13, Nov. 20, 1992).

Early Childhood Education: What Are the Costs of High-Quality Programs?

(GAO/HRD-90-43BR, Jan. 24, 1990).

(106708) Page 48 GAO/HEHS-97-75 Welfare Reform and Child Care Supply
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100