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Child Care Subsidies, Low-Wage Work and Economic Development

Author: ELIZABETH E. DAVIS and MARCIE JEFFERYS
Published in IJED, Vol. 9 No. 3

Public spending for work supports like child care subsidies has been greatly increased in recent years to “make work pay’ and to encourage the labor force participation of low-income parents. This study tracked changes in earnings and employment sectors over three years for parents receiving child care subsidies in Minnesota. Employment of these parents was more concentrated in a few sectors of the economy than for the workforce as a whole. The overall pattern of concentration of employment did not change over the three years, but parents who moved into or stayed in the health care sector received higher average wages and experienced greater wage growth. Given the importance of the health care sector for community development and projected future shortages of healthcare workers, opportunities for linking work supports like child care subsidies with training and employment in these fields could improve outcomes for both families and communities.

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