In the newly-passed Ohio state budget, one of the major new provisions is the Child Care Choice Voucher program. Much like school vouchers, a topic we’ve covered before, child care vouchers provide subsidies to families in order to pay for some pre-approved child care options.
Unlike school vouchers, the Child Care Choice Voucher Program is not targeted towards low-income families. This is because of the Publicly Funded Child Care program, which covers child care costs for low-income families. Instead, this new voucher program is specifically targeted towards families between 145% and 200% of the federal poverty line.
My colleague Rob Moore has written about the impact of child care quality before, and it would seem on its surface that these types of vouchers help address this problem. If you give parents the resources to identify a child care opportunity that they think will work well for their child, then it should be the case that more children end up in beneficial situations.
However, this ignores a major issue in the child care space: the supply of child care is largely insufficient in many communities.
Areas without an adequate supply of child care are often called child care deserts, and they are common all across the country. According to the think tank The Center for American Progress, nearly 40% of Ohioans live in child care deserts.
From an economic perspective, these vouchers could lead to fewer child care deserts in the long run. If the state is putting more money into these markets than there otherwise would be, then they would create an incentive for new child care providers to enter the market and offer services in places that might not currently have them. However, there are some hurdles that need to be overcome in order to ensure this ends up actually benefitting families.
One issue these vouchers might face is an uptake problem. People need to claim the vouchers and increase demand to encourage suppliers to enter the market. Families where a parent acts as a full-time caregiver or those who rely on relatives for child care might prefer those options and choose not to utilize the vouchers.
Another issue that might minimize the effectiveness of these vouchers is inframarginality. Essentially, if these families are already spending money on child care, then the vouchers aren’t actually adding any money into the child care market. It essentially acts as a cash transfer, and families who receive vouchers would just be able to increase their spending elsewhere. It is probably unlikely that the low-income families that don’t quite qualify for public child care would experience this like a cash transfer, but it is an important consideration.
While the Child Care Choice Voucher Program has the potential to increase access and flexibility for low-income families, its ultimate effectiveness will depend on how it interacts with the broader child care market. Without addressing the underlying supply shortages and ensuring families actually use the vouchers, the program may fall short of its goal to meaningfully expand child care access. Hopefully, this program can encourage more people to provide child care and help eliminate some of the deserts that exist across the state.