published in: Economic Inquiry, 2007, 45 (2), 233-250
Using a data set from the post welfare reform environment (the 1999 National Survey of
America’s Families), this paper investigates the impact of child care subsidies on the
standard work (i.e., work performed during the traditional work hours of 8 a.m. and 6 p.m.
through Monday and Friday) decision of single mothers and tests whether this impact differs
between welfare recipients and nonrecipients. The econometric strategy accounts for sample
selection into the labor force and the potential endogeneity of child care subsidy receipt and
welfare participation. Results suggest that child care subsidies are associated with a 6
percentage point increase in the probability of single mothers working at standard jobs. When
the impact of subsidies is allowed to differ between welfare recipients and non-recipients,
results indicate that welfare recipients are 14 percentage points more likely to work at
standard jobs than others when they are offered a child care subsidy. Among non-recipients,
child care subsidies increase standard work probability by only 1 percentage point. These
results underscore the importance of child care subsidies helping low-income parents,
especially welfare recipients, find jobs with conventional or standard schedules and lend
support to the current practice of states’ giving priority to welfare recipients for child care
subsidies. Results are found to be robust to numerous specification checks.
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