The Consequences of Insufficient Household Income

Strategy 3: Access Child Care Assistance
Many states and local communities have programs to make child care more affordable, including subsidies
and vouchers. Programs differ by state and community, and some local areas have additional nonprofit
assistance. Eligibility varies based on income, family size, and type and cost of care. Access to child care
assistance is often provided on the condition that a parent is working, looking for employment, or in school
full time. In most states, families are required to pay for a portion of their child care costs. The eligibility level
for assistance in most states is approximately 200 percent of the FPL, though in some states it may be as
high as 250 percent. At these levels, many ALICE families do not qualify for assistance, but they still struggle
to afford quality early care and education (Schulman & Blank, 2014).
Consequences
The benefit “cliff”: Parents juggling their roles as caregivers and income earners balance their
resources from wages, government assistance, and support from social networks such as family,
friends, and local service providers. Earning above a certain level can cause some ALICE families to
lose child care benefits (the “cliff” effect). In many cases, parents have to choose not to work extra
hours at their job, not to take a raise, or not to accept a job offer in order to remain eligible for their
child care subsidy (The Indiana Institute for Working Families, 2012; East & Roll, 2010; Randolph,
2014).
Strategy 4: Live in a District With Publicly Funded Preschool
Public preschools provide great savings to ALICE and poverty-level families. Between 2014 and 2015, 42
states and the District of Columbia offered state-funded preschool programs that collectively served almost
1.4 million children nationwide. These programs allowed 5 percent of 3-year-olds and 29 percent of 4-yearolds
to benefit from state-funded preschool, a significant increase from 14 percent of 4-year-olds in 2002.
In addition, federally funded Head Start programs brought the national public pre-K enrollment rate to 41
percent of 4-year-olds and 16 percent of 3-year-olds (National Institute for Early Education Research, 2015;
Reardon & Portilla, 2015). State-funded pre-K programs have been found to improve learning, especially for
economically disadvantaged children (The Pre-Kindergarten Task Force, 2017).
Consequences
Persistent gaps in care: State-funded preschool enables many children in low-income families to
attend preschool who otherwise would not have access. However, most publicly funded preschool
programs do not offer wraparound care (before and after school hours) or summer care. ALICE
families who work from 9 a.m. to 5 p.m. year-round need care from 8 a.m. to 6 p.m. (and often
longer) during the school year and over the summer. Some preschools offer wraparound care for an
added fee; many do not offer any programming during the summer. So while families may save costs
overall by using public preschools, they often still have to pay for wraparound and summer care or
patch together plans for those time periods that rely on uncertified caregivers, such as family, friends,
or in-home providers. During the school year, they also have to work out transportation between
those additional care sites and their preschool (The Pre-Kindergarten Task Force, 2017).
Inconsistent program availability: Finding publicly funded preschools is often difficult, as they
still only serve a small percentage of the population. Enrollment of 3- and 4-year-olds in statefunded
preschools has grown by only one percentage point since 2010, despite an overall spending
increase to over $6.2 billion nationwide in 2014 (National Institute for Early Education Research,
2015).
28 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME