The Role of State Subsidy Policies in Early Education Programs' Decisions to Accept Subsidies: Evidence from Nationally Representative Data

Research Findings: Families need access to early care and education programs, both to ensure parents' ability to work and support children's development. Subsidies through the Child Care and Development Fund (CCDF) are a set of policies aimed at assisting families living in poverty with accessing early education. However, the number of early education centers that accept subsidies is declining. Using observational data from the National Survey of Early Care and Education and state subsidy policies from the CCDF Policies Database, we use an innovative application of propensity score methods to estimate causality and provide actionable findings regarding the effect of state-specific policies on centers' subsidy participation. We create comparable groups of centers that accept subsidies and centers that do not, based on research-supported program- and community-level predictors of subsidy participation. Logistic regression models using the matched sample demonstrated state-specific subsidy policies impacted subsidy participation. Specifically, as the state subsidy reimbursement rate increased, centers were more likely to accept subsidies. Practice or Policy: Findings point to meaningful state-level actions and policies that may incentivize centers' subsidy participation. In general, state policies that increase revenue for centers accepting subsidies (e.g. reimbursement for child absences) may result in higher rates of subsidy participation.