SUBSIDIZING THE CHILDCARE ECONOMY.

AuthorZhang, Yiran

INTRODUCTION 68 I. FORMALITY AND INFORMALITY IN THE CHILDCARE ECONOMY 73 A. Sectors in the Childcare Economy 73 1. Center-Based Care 74 2. In-Home Nanny Care 76 3. Family Child Care 78 4. Family, Friend, and Neighbor Care 80 B. characteristics and Distribution of Different Modes of care 83 1. Formal/Informal and Market/Family 84 2. The Distribution of Formality/Informality 84 II. GOVERNMENT PROGRAMS SUBSIDIZING CHILDCARE 90 A. Multiple Policy Goals in Subsidizing childcare 90 B. CCDF Subsidies' Policy Goals in Two Markets 94 III. DIVERGENCE AND CONVERGENCE IN CHILDCARE POLITICS 99 A. Three Advocate Approaches to Childcare Subsidies 99 1. Early Childhood Education (ECE) Experts 100 2. Feminist and Grassroots Labor Groups 102 3. Poverty Policy Advocates 105 B. Divergence and Convergence in Advocate Politics 106 IV. FORMALIZATION THROUGH SUBSIDIES AND ITS (UN)INTENDED CONSEQUENCES 111 A. The Formalization Reform at State and Federal Levels 111 B. A Distributional Analysis of the Formalization Reform 114 1. The Formalization Dynamics 115 2. Effects Across Childcare Providers and the Workforce 118 3. Effects Across Low-Income Families 121 4. Effects on Lower-Middle-Income Families 124 V. POSSIBLE POLICY ALTERNATIVES 124 A. Possible Policy Responses 125 B. Suggested Policy Responses 126 CONCLUSION 129 INTRODUCTION

Childcare subsidy programs help to structure a childcare economy that ranges from centers that are highly formal businesses, with employees and regulated quality standards, to various types of more informal care sited in the provider's or the child's home. Federal and state policies in the Child Care and Development Fund (CCDF), the major federal-state partnership program making quality childcare accessible to low-income families, are shifting to concentrating childcare subsidies primarily on formal center-based care, enhancing regulation of subsidized providers, and incorporating standardized quality measurements into subsidy calculations. (1) The interaction among these measures constitutes a formalization reform. This Article unpacks the trade-offs associated with different modes of care, analyzes the political economy context of this formalization trend, and offers the first systematic account of its costs and benefits for children, parents, providers, and employees in the childcare economy. It concludes that the costs of this formalization trend to low-income families and home-based providers have been underestimated and urges policy responses that support select forms of home-based care.

This Article contributes to two academic debates. First, it takes part in the debate about public childcare spending programs by positing an internally diverse childcare economy. Scholarship on childcare subsidies has either discussed their benefits to childcare in the aggregate or focused on their effect on recipients. For example, Maxine Eichner attributes the scarcity of public childcare spending to the "free-market family" ideology holding that the "free market" is a sufficient, reliable, or superior institution to provide for families' care needs. (2) She finds that the current system is neither functional nor fair. (3) Eichner then calls for more government subsidies to improve childcare for all families and benefit society at large. (4) Focusing on recipients, welfare law and critical race theory scholars have studied childcare subsidies as a subsidiary to anti-poverty laws' work requirements for low-income mothers of color seeking welfare benefits, criticizing the mandate of paid work for creating an unaddressed care gap. (5) But they do not adequately consider subsidies' impacts on other actors.

This Article pursues a system-wide distributional analysis to study the subsidies' heterogeneous impacts across the childcare economy. Thus, it follows Noah Zatz, who has examined welfare programs' heterogenous distribution among dual-earner, breadwinner-caregiver, and single-parent families. (6) Extending this approach, this Article studies subsidies' distributional impacts among various modes of childcare and involved parties. Childcare subsidy programs and their accompanying regulatory systems define and distribute childcare, its compensation and value, and other resources. Given the resource scarcity across the childcare economy, the economic interactions within it are highly sensitive to government subsidies. Thus, access to subsidies--and conversely, their absence--can be a life-changer for a family, a provider, or even a whole sector producing a specific mode of care. In other words, the subsidy programs that are designed to channel resources to vulnerable providers, parents, and children also distribute among them--and in some circumstances, away from them.

Specifically, this Article finds that the CCDF's formalization reform is redistributing resources from informal, home-based care to formal centers, and, accordingly, from the former's constituents to the latter's. On the user side, low-income families, especially single working mothers of color, disproportionately demand the mode of care--low-cost, flexible-hour, adjacent location, and culturally compatible--that home-based care is much more likely to provide. In contrast, center care raises children's school readiness and is most compatible with upper-middle-income families' needs. (7) For the childcare workforce, center-and home-based childcare present two contrasting forms of paid care work: a more regulated, higher appraised, yet hierarchical and detached model of work vis-a-vis less visible, less compensated yet more flexible work where the provider enjoys both the pros and cons of working inside her own home. As a result, the CCDF policies marginalizing home-based care have unaddressed costs on low-income parents and home-based providers.

More broadly, this Article adds to the academic literature on informal care work. Low-income women informally provide caregiving to others' children inside private homes, yet this phenomenon remains understudied. (8) The mainstream literature has a strong preference against informality and proposes either extending formal family law or labor law or curbing informal practices. For instance, Martha Fineman's early work arguing that the legal family should reflect dependency and caregiving bonds has inspired scholars to argue that informal caregivers should enjoy formal rights as family members in child custody and social services. (9) In parallel, labor feminists, motivated by the International Labor Organization's agenda on the informal economy, argue for extending formal employment standards to paid care workers and flag informal work as extreme labor exploitation. (10) Although these two approaches have both achieved some success in revising the formal laws, neither has successfully converted the mass of informal caregivers into formality. (11) Further, they often compete at the border between them: courts, for instance, tend to rule that a caregiver cannot simultaneously have full rights as a family member and as a worker. (12) Some scholars propose to curb informal care by expanding public investment in formal care. For instance, Eichner, based on its lack of regulation and low quality indicators, regards informal home-based care as suboptimal and argues for expansively subsidizing formal care. (13)

A more critical approach to informality emerges among some labor law scholars. Resisting the negative presumptions about informal work, some explore the diverse packages of benefits and harms to workers within the informal economy while others propose a more contextual analysis of informality. (14)

Following this critical approach, this Article analyzes informality and formalization in a granular way. By mapping divergent understandings and advocacy agendas of childcare, it sheds light on the costs of formal care and the benefits of informal care that the literature has so far overlooked. Further, instead of treating the quality of informal care as a precondition for policymaking, it unpacks it as a product of distributional childcare subsidy policies. Subsidy policies stipulate a set of evaluation standards that favor formal care and then allocate scarce resources in a way that deprives the home-based sectors of opportunities to upgrade. (15) Meanwhile, informal care's benefits remain under-acknowledged and, hence, not sufficiently incorporated into the subsidized childcare economy.

Thus, this Article argues for policy alternatives that support select forms of informal care to mitigate the formalization reform's harsh consequences to the home-based sectors and low-income working parents. They include flexible regulation of providers who fill logistical care gaps, subsidizing cross-sector partnerships, and expanding quality metrics to include values expressed by low-income working parents.

Beyond its contribution to the academic debate, this Article also writes into a salient political moment for childcare policies. The COVID pandemic's disruption of the childcare economy and the resulting impacts on families and workers made the public more aware than ever that a functional childcare economy is fundamental to the society. President Biden's Build Back Better framework's proposal to strengthen the care infrastructure (16) also has reinvigorated political attention to various government spending on childcare. This has made the present a politically ripe moment to re-examine existent subsidy programs' redistributive role in the childcare economy and beyond.

To unpack the analysis. Part I first examines childcare along the formal/informal dimension to outline the sectors in the childcare economy and the sectoral distribution across families in different income groups. Part II maps the plural policy goals of childcare subsidies and describes how the tension among these policy goals plays out in the CCDF. The rest of the Article examines in detail the CCDF's formalization reform. Part III maps invested...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT