Welfare Reform: Implications of Increased Work Participation for Child
Care (Letter Report, 05/29/97, GAO/HEHS-97-75).

Pursuant to a congressional request, GAO reviewed: (1) the extent to
which the current supply of child care will be sufficient to meet the
anticipated demand for child care under the new welfare reform law; and
(2) other challenges that face low-income families in accessing child
care.

GAO noted that: (1) as states implement the new welfare reform
legislation and are required to move larger percentages of their
caseloads into work-related activities, greater numbers of welfare
recipients are likely to need child care; (2) consequently, the gap that
exists between the current supply of known child care and child care
demand is likely to grow, with disproportionately larger gaps for
infants and school-aged children; (3) these gaps will have to be
addressed through growth in the supply of known child care, care unknown
to the states, or, more likely, both; (4) if supply of known child care
does not increase, states may have to rely more on care for which they
have little information; (5) thus, the assistance they can provide to
welfare parents in locating care may be more limited; (6) state and
local officials in the 4 cities and counties GAO reviewed regarded their
current supply of known child care as inadequate for meeting even the
demand they currently face for children in certain age groups,
particularly for low-income populations in three of the areas reviewed;
(7) unless the supply of known child care for certain age groups at
these sites is increased, the gap between supply of known care and
anticipated demand is likely to become even greater as welfare reform is
fully implemented; (8) for example, GAO estimated that the supply of
known child care in Chicago would be sufficient to meet just 14 percent
of the demand for infant care that will probably exist by the end of
fiscal year 1997; (9) without any increase, by 2002, when states will be
required to have achieved welfare work participation rates of 50
percent, the known supply could meet only about 12 percent of the
estimated demand for infant care and even less in the poorest areas of
Chicago; (10) issues other than gaps between supply and demand that
could also affect low-income families' access to care include the price
of care, the availability of nonstandard-hour care, transportation
issues, and the availability of quality care; (12) for example, GAO's
work shows that child care consumes a high percentage of poor families'
income; (11) another critical issue facing poor families is that many
welfare parents are likely to obtain work at low-skill jobs that operate
on nonstandard schedules; (12) however, many of the known providers at
the sites reviewed did not offer child care at nonstandard work hours; *

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-97-75
     TITLE:  Welfare Reform: Implications of Increased Work 
             Participation for Child Care
      DATE:  05/29/97
   SUBJECT:  Child care programs
             Welfare recipients
             Employment or training programs
             State-administered programs
             Children
             Infants
             Workfare
IDENTIFIER:  HHS Temporary Assistance for Needy Families Program
             Baltimore (MD)
             Chicago (IL)
             Benton County (OR)
             Linn County (OR)
             Job Opportunities and Basic Skills Training Program
             JOBS Program
             Child Care and Development Block Grant
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Subcommittee on Children and
Families, Committee on Labor and Human Resources, U.S.  Senate

May 1997

WELFARE REFORM - IMPLICATIONS OF
INCREASED WORK PARTICIPATION FOR
CHILD CARE

GAO/HEHS-97-75

Welfare Reform and Child Care Supply

(106708)


Abbreviations
=============================================================== ABBREV

  AFDC - Aid to Families With Dependent Children
  BLS - Bureau of Labor Statistics
  CCDBG - Child Care Development Block Grant
  CCR&R - child care resource and referral agencies
  CPS - Current Population Survey
  FSA - Family Support Act
  HHS - Department of Health and Human Services
  JOBS - Job Opportunities and Basic Skills Training
  NCCS - National Child Care Survey
  SIPP - Survey on Income and Program Participation

Letter
=============================================================== LETTER


B-270237

May 29, 1997

The Honorable Christopher Dodd
Ranking Minority Member
Subcommittee on Children and Families
Committee on Labor and Human Resources
United States Senate

Dear Senator Dodd: 

In August 1996, the federal government made major changes to the
nation's welfare system when the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 was enacted into law.  The act
abolished the Aid to Families With Dependent Children (AFDC) program,
which in fiscal year 1996 spent over $20 billion providing cash
assistance to more than 4.6 million families with about 8.6 million
children.  The new law created block grants to states for Temporary
Assistance for Needy Families that have more stringent requirements
for welfare parents to obtain jobs in return for their benefits than
AFDC did.  The new law requires that at least 25 percent of a state's
adult welfare caseload be working or participating in work-related
activities in fiscal year 1997, increasing to 50 percent by fiscal
year 2002.  To comply with these new work requirements, significantly
more welfare parents are likely to need child care.  State and local
administrators are beginning to examine whether their current supply
of child care will be sufficient to meet the increased demand for
care--especially for particular groups of children.  Data about the
states' child care supply will be an important tool for states in
helping welfare parents successfully make the transition to work. 
Given this, you requested that we (1) measure the extent to which the
current supply of child care will be sufficient to meet the
anticipated demand for child care under the new welfare reform law
and (2) identify other challenges that face low-income families in
accessing child care. 

To accomplish our objectives, we developed a methodology for
estimating (1) the magnitude of current demand for child care in
family child care homes and centers, (2) the future demand under the
federal welfare law, and (3) the extent to which the current supply
of known family child care homes and centers is capable of meeting
current and future demand.  For purposes of this report, known care
mostly consists of providers who are regulated by the state as well
as some who are unregulated\1 and listed in a child care resource and
referral agency (CCR&R) database.\2 Care unknown to the state or the
CCR&Rs includes relative care, unregulated family child care, and
care provided in a child's home by a nanny.  We elaborate further on
the different types of child care later in this report. 

In calculating our estimates, we held the supply of known child care
constant.  While the total supply of child care, known and unknown to
the states, should eventually increase in response to an increase in
demand, our model, by holding known supply constant, presents a
picture of how much current known supply would have to increase to
meet the new demand.  Thus, the gap we identify is between known
supply and anticipated demand.  This gap could be filled by care
known or unknown to the states or, more likely, by both. 

Ideally, we would like to have measured the total supply of child
care.  We recognize the important role that other types of care play
in meeting child care demand; however, our review focused on known
care because it is the type of care for which states and localities
have the most comprehensive data.  In focusing on known care, we are
making no judgment about the quality of either type of care. 

In developing our information, we analyzed child care supply data and
estimated child care demand at four sites--two urban and two
nonurban--in three states.  Our selected urban areas were Baltimore
City, Maryland, and Chicago, Illinois; our nonurban sites were Benton
and Linn counties in Oregon.  We selected these sites not only
because they provided a mix of urban and nonurban areas, but also
because comprehensive child care supply data were available from
local CCR&Rs.  Other factors considered in our final selection were
geographic diversity and differences in the extent to which sites
regulated their child care providers.\3


--------------------
\1 Regulated care is offered by providers whom the state requires to
obtain a license or become registered with the state; unregulated
care is offered by providers whom the state does not require to
register to provide such services.  The three states we reviewed
require unregulated providers to meet some requirements if they are
caring for children whose child care costs are paid by the state. 
Typically, the provider signs a form or checklist to certify that it
meets or will follow certain basic safety and health requirements. 

\2 CCR&Rs help match parents looking for child care with providers
who can serve their specific child care needs.  Typically, these
agencies are funded by state or local child care agencies, by private
employers, and through charitable contributions.  In addition to
helping parents find care, CCR&Rs perform other services, including
recruiting and training providers, helping states administer child
care subsidy programs, and maintaining a current and comprehensive
database of an area's child care supply. 

\3 See app.  I for further discussion of our methodology. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

As states implement the new welfare reform legislation and are
required to move larger percentages of their caseloads into
work-related activities, greater numbers of welfare recipients are
likely to need child care.  Consequently, the gap that exists between
the current supply of known child care and child care demand is
likely to grow, with disproportionately larger gaps for infants and
school-aged children.  These gaps will have to be addressed through
growth in the supply of known child care; care unknown to the states;
or, more likely, both.  If supply of known child care does not
increase, states may have to rely more on care for which they have
little information.  Thus, the assistance they can provide to welfare
parents in locating care may be more limited. 

State and local officials in the four cities and counties we reviewed
regarded their current supply of known child care as inadequate for
meeting even the demand they currently face for children in certain
age groups, particularly for low-income populations in three of the
areas reviewed.  Unless the supply of known child care for certain
age groups at these sites is increased, the gap between supply of
known care and anticipated demand is likely to become even greater as
welfare reform is fully implemented.  For example, we estimated that
the supply of known child care in Chicago would be sufficient to meet
just 14 percent of the demand for infant care that will probably
exist by the end of fiscal year 1997--1 year after enactment of the
welfare reform legislation.  Without any increase, by the year 2002,
when states will be required to have achieved welfare work
participation rates of 50 percent, the known supply could meet only
about 12 percent of the estimated demand for infant care and even
less in the poorest areas of Chicago.  Thus, we estimated that, by
the end of fiscal year 1997, the demand for infant care could exceed
the known supply by about 20,000 spaces; by fiscal year 2002, this
number could increase to almost 24,000. 

Issues other than gaps between supply and demand that could also
affect low-income families' access to care include the price of care,
the availability of nonstandard-hour care, transportation issues, and
the availability of quality care.  For example, our work shows that
child care consumes a high percentage of poor families' income.  In
Benton County, Oregon, infant care at a child care center consumes
more than 20 percent of the median household income for a poor
family.  Another critical issue facing poor families is that many
welfare parents are likely to obtain work at low-skill jobs that
operate on nonstandard schedules, such as janitor or cashier. 
However, many of the known providers at the sites reviewed did not
offer child care at nonstandard work hours--hours outside the
traditional "9 to 5" work schedule.  The number of providers who
offered this type of care ranged between 12 and 35 percent of the
total number of known providers in the four child care markets we
reviewed. 


   BACKGROUND
------------------------------------------------------------ Letter :2


      WELFARE REFORM AND CHILD
      CARE DEMAND
---------------------------------------------------------- Letter :2.1

Before the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, the Congress had enacted changes to the
nation's welfare system in 1988 by passing the Family Support Act
(FSA).  This law created the Job Opportunities and Basic Skills
Training (JOBS) program, which expanded upon previous programs
designed to help families on welfare obtain education, training, and
work experience to become self-sufficient.  The Department of Health
and Human Services (HHS) is the agency at the federal level that was
responsible for JOBS program administration and oversight. 

Recognizing the importance of child care to this effort, the Congress
provided for child care subsidies to welfare parents participating in
JOBS activities and to those who had recently moved from welfare to
work.  In fiscal year 1996, the Congress appropriated $954 million to
the states through the child care programs established by FSA to help
parents pay for child care.\4 States also used the Child Care
Development Block Grant (CCDBG) as another source of funding to pay
for the child care of JOBS participants.  CCDBG was created by the
Omnibus Reconciliation Act of 1990; in fiscal 1996, the Congress
appropriated $935 million to the states through CCDBG. 

FSA required states to have specific percentages of their welfare
caseloads participate in JOBS activities, starting at 7 percent in
fiscal year 1991 and rising to 20 percent by the end of fiscal year
1995.  However, these participation requirements were not applicable
to the states' entire welfare caseload.  States were permitted to
exempt from JOBS activities welfare clients who were already working
30 hours or more a week; ill or incapacitated in some way; full-time
students in elementary, vocational, or high schools; children under
the age of 16; or caring for a child under the age of 3.\5
Individuals who had not been exempted were required to participate in
20 hours of JOBS activities per week, on average.  If child care was
unavailable or resources were unavailable to pay for care, states
could either exempt welfare families or limit their participation in
JOBS activities.  Because of these and other provisions, as well as
the amount of resources states devoted to their JOBS programs, the
number of welfare families participating in JOBS nationwide was
limited--about 13 percent of the entire caseload in any given month
in fiscal year 1994.  This low level of participation limited demand
for certain types of care that were more difficult to find, such as
infant care and care during nonstandard work hours.\6

Compared with the former welfare provisions, the Personal
Responsibility and Work Opportunity Reconciliation Act incorporates
more stringent work participation provisions and requires that a
larger proportion of welfare parents obtain work or participate in
work-related activities.  For example, the new law requires states to
move at least 25 percent of their welfare families into work or
work-related activities by fiscal year 1997 and at least 50 percent
by fiscal year 2002.  All welfare parents are required to participate
in these activities, but states have the option to exempt single
parents who are caring for a child up to 1 year old.  States are also
permitted to lower the age-of-child exemption.  Michigan, for
example, requires parents with children 3 months old or older to
obtain work or engage in work-related activities.  Under the new law,
more mothers are likely to need child care, particularly for very
young children. 


--------------------
\4 This amount is the federal appropriation for fiscal year 1996; it
does not include the amount of state dollars used.  FSA created two
sources of child care funding to be used by the states---AFDC child
care and transitional child care.  Both were matched, open-ended
entitlements, which meant that, in order for a state to use the
federal funds, the state had to first match the federal amount it
needed with state dollars. 

\5 States were permitted to change the age-of-child exemption so that
parents with children 1 year old or older could be required to
participate in JOBS activities.  According to state plans submitted
to HHS for fiscal years 1994-1996, 13 states had planned to use this
option. 

\6 Welfare to Work:  Child Care Assistance Limited; Welfare Reform
May Expand Needs (GAO/HEHS-95-220, Sept.  21, 1995), pp.  4-6. 


      TYPES OF CHILD CARE SETTINGS
---------------------------------------------------------- Letter :2.2

Parents can choose from three types of child care settings:  in-home
care, where a child is cared for in the child's home; family care,
where the child is cared for in the home of a provider; and center
care, where a child is cared for in a nonresidential setting. 
In-home care, such as that provided by au pairs or nannies, is
usually provided for the child or children of one family that resides
in the home.  Family child care, on the other hand, is provided to a
small number of unrelated children--typically fewer than six--in the
provider's home.  Child care centers, also known as nursery schools
or preschools, are nonresidential facilities that are able to care
for much larger numbers of children--on average, about 60.  Centers
are located in a variety of places, including churches, schools, and
businesses.  Additionally, care can be provided in family child care
or in-home settings by someone related to the child other than the
parents, such as a grandparent or an aunt.  This care is commonly
called relative care. 


      CHILD CARE PROVIDERS
---------------------------------------------------------- Letter :2.3

Child care supply in a local market consists of providers who are
known and unknown to the states.  Known providers are mostly those
who are regulated by the state but also include some who are
unregulated.  Providers that are regulated by the state are required
to meet certain standards for operating that unregulated providers
may or may not meet.  Such standards specify, for example, the number
of smoke detectors a provider needs to have, the maximum number of
children per staff person allowed, or that children are required to
be immunized before coming into a provider's care.  These standards
are established by the state or local government, and compliance with
them is monitored periodically by the governing entity. 

Most center care in states is regulated, although some states exempt
centers from regulation if they are sponsored by a religious group or
a government entity or are regulated by another government body, such
as a local education department.  Much family child care is
unregulated:  One study has estimated that between 10 and 18 percent
of family child care homes are regulated.\7 In-home care and care by
relatives is almost never regulated by states. 

States and localities maintain data about providers that can help
parents in choosing a provider and states and localities in
determining the extent of supply.  Obtained from either CCR&Rs or
state licensing offices, these data include, for example, the total
number of known providers at a given time, whether providers are
centers or family child care homes, where providers are located, the
number and ages of children they serve, how much they charge, and
their hours of operation.  With these data, states have a tool to
facilitate matching child care needs of individual welfare families
with the services offered by certain providers.  Helping parents find
providers is important given the difficulty welfare parents may have
in negotiating the child care market on their own, the barrier that
finding child care can become to welfare parents' labor force
participation, and the states' own incentive to move their welfare
caseload into the workforce to meet requirements of the new federal
law.  In addition, information about the supply of known child care
providers allows states to target groups of providers for
communitywide supply-building efforts, if needed. 


--------------------
\7 Willer, B., Hofferth, S., Kisker, E.E., and others, The Demand and
Supply of Child Care in 1990 (Washington, D.C.:  National Association
for the Education of Young Children, 1991). 


      FACTORS INFLUENCING THE
      CHOICE OF CHILD CARE SETTING
---------------------------------------------------------- Letter :2.4

The child care setting parents use is frequently related to the age
of the child and the employment status of the mother.  Many mothers
with children under the age of 2 who work full time place their
children in the care of a family child care provider as opposed to a
center or in-home setting.  For example, in 1993, 40 percent of
children under 1 year of age whose mothers worked were cared for in a
provider's home; 38 percent of children between 1 and 2 were also
cared for in this setting.  As children reach preschool age, care in
organized facilities, such as child care centers and nursery schools,
becomes more prominent, although the use of family child care is
still significant.  Of children who were 3 to 4 years old and had
working mothers in 1993, approximately 37 percent were cared for in
centers.  For those who were 4 to 5 years of age and whose mothers
were working, almost 42 percent were cared for in centers.\8

Other important factors, such as family income, marital status, and
the number of days and hours of the day worked, also influence the
choice of child care setting.  For example, low-income families whose
annual income falls below $15,000 generally rely more on relative
care and less on center-based care than do nonpoor families.\9

Low-income mothers who are single and employed also rely heavily on
relative care, although they also make significant use of family
child care homes and centers.\10 Relative care is also used
frequently by families whose jobs require them to work nonstandard
hours. 


--------------------
\8 GAO analysis of the Survey of Income and Program Participation,
U.S.  Bureau of the Census, U.S.  Department of Commerce, fall 1993. 

\9 National Research Council, Child Care for Low-Income Families
(Washington, D.C.:  National Academy Press, 1995), p.  7. 

\10 Thirty percent of the children of low-income mothers who are
single and employed are with relatives, 27 percent are in centers,
and 21 percent are in family child care homes (Child Care for
Low-Income Families, p.  6). 


   GREATER NEED FOR INFANT AND
   SCHOOL-AGED CARE ANTICIPATED
   UNDER WELFARE REFORM
------------------------------------------------------------ Letter :3

For a number of years, the child care literature has documented the
difficulty in finding care for certain age groups of children and
specific types of child care, including care for infants and
school-aged children, children with disabilities, and children during
nonstandard work hours.  Our earlier work found that, because of
shortages in child care for infants, school-aged children, sick
children, and children with special needs as well as shortages of
care during nonstandard work hours, state and county administrators
had difficulty serving the child care needs of welfare parents who
were participating in the JOBS program.\11

CCR&R staff, as well as state and local officials at the four sites
we visited, said that finding some of these types of care is still
difficult.  Officials at all sites were concerned that the new
federal welfare act or their own state welfare initiatives might
increase demand for certain types of care and further exacerbate
low-income parents' problems in finding care.  We estimated that the
current supply of known care in the four cities and counties we
reviewed can meet less of the demand for infant or school-aged care
than it can for preschool care (see table 1).  We projected that this
gap will grow as higher work participation rates are required under
the new welfare act, assuming no growth in known supply.  In Linn
County, Oregon, for example, we estimated that the supply of known
child care is sufficient to meet 45 percent of the current demand for
school-aged care.  By the end of fiscal year 1997, when 25 percent of
the state's welfare recipients will be required to participate in
work or a work-related activity, known supply could be sufficient to
meet 43 percent of school-aged demand, assuming there is no growth in
that supply.  In fiscal year 1999, when 35 percent of the state's
welfare caseload will be required to participate, known supply could
be sufficient to meet 42 percent of the demand; in fiscal year 2002,
when participation rates of 50 percent are implemented, known supply
could be sufficient to meet 40 percent of the demand. 



                          Table 1
          
            Estimates of the Percentage of Child
              Care Demand That Could Be Met by
           Currently Known Supply for Various Age
                     Groups, 1996-2002


               Percentage of
              current demand
               that could be
                      met by       25%       35%       50%
                   currently  particip  particip  particip
                known supply     ation     ation     ation
------------  --------------  --------  --------  --------
Baltimore City
----------------------------------------------------------
Infant                    37        33        32        30
Preschool                144       130       125       118
School-aged               49        43        41        38

Chicago
----------------------------------------------------------
Infant                    16        14        13        12
Preschool                 75        68        65        62
School-aged               23        20        19        17

Benton County
----------------------------------------------------------
Infant                    67        64        63        61
Preschool                 92        90        89        87
School-aged               66        64        63        62

Linn County
----------------------------------------------------------
Infant                    44        40        39        38
Preschool                 74        71        69        68
School-aged               45        43        42        40
----------------------------------------------------------
At all of our sites, CCR&R staff were the least concerned about the
availability of preschool care, as compared with that for other age
groups, because they believed the supply of known preschool care is
the most adequate to meet demand.  In Baltimore City, for example, we
estimated that the supply of known preschool care exceeds the current
demand as well as estimated future demand under the new welfare act,
as shown in table 1.  Given the city's current excess known supply
for this age group, CCR&R staff in Baltimore City said they are not
encouraging prospective providers to offer care for preschoolers. 

While examining the percentage of demand that known supply is capable
of meeting is a useful way to present a picture of child care at
various sites, it masks the size of the problem at some sites.  For
example, in percentage terms, the supply of known infant care in
Baltimore City could be sufficient to meet about 37 percent of the
demand for such care; in absolute terms, that supply could leave an
unmet demand for care of over 3,000 infants, as shown in table 2. 
Similarly, while known supply could be sufficient to meet about 75
percent of the demand for preschool care in Chicago, it could leave
the parents of more than 13,000 preschool children looking elsewhere
for care. 



                          Table 2
          
          Estimated Gaps Between Known Supply and
           Demand for Child Care for Various Age
                     Groups, 1996-2002


                 Current gap
                     between       25%       35%       50%
                known supply  particip  particip  particip
                  and demand     ation     ation     ation
--------------  ------------  --------  --------  --------
Baltimore City
----------------------------------------------------------
Infant                 3,369     4,037     4,304     4,704
Preschool\a               \a        \a        \a        \a
School-aged            6,115     7,901     8,615     9,687

Chicago
----------------------------------------------------------
Infant                17,046    20,402    21,744    23,757
Preschool             13,450    19,247    21,566    25,045
School-aged           26,393    31,590    33,669    36,787

Benton County
----------------------------------------------------------
Infant                   147       171       181       196
Preschool                100       136       150       172
School-aged              355       389       403       424

Linn County
----------------------------------------------------------
Infant                   388       443       465       498
Preschool                470       561       597       652
School-aged              828       920       957     1,012
----------------------------------------------------------
\a No numbers are shown for preschool children in Baltimore City
because we estimated that supply for preschool care currently exceeds
demand and will do so under welfare reform. 


--------------------
\11 GAO/HEHS-95-220, Sept.  21, 1995. 


   NEED FOR INFANT AND SCHOOL-AGED
   CARE GREATEST IN POOR AREAS
------------------------------------------------------------ Letter :4

Areas with the lowest average household income will probably be most
affected by welfare reform.  As shown in table 3, the largest gaps
between known supply and demand in the poor areas\12

of the selected sites exist for infants, school-aged children, or
both.  For example, in poor areas of Chicago, currently known supply
is sufficient to meet 61 percent of the demand for preschool care,
compared with 11 percent and 30 percent of the demand for infant and
school-aged care, respectively.  A similar relationship between these
types of care exists in nonpoor areas of Chicago as well. 



                                         Table 3
                         
                           Estimates of the Percentage of Child
                             Care Demand That Could Be Met by
                           Currently Known Supply for Poor and
                                 Nonpoor Areas, 1996-2002


                                                         25%           35%           50%
                         Nonpoor                participatio  participatio  participatio
                           areas    Poor areas             n             n             n
------------------  ------------  ------------  ------------  ------------  ------------
Baltimore City
----------------------------------------------------------------------------------------
Infant                        48            32            27            25            23
Preschool                    237           109            94            89            83
School-aged                   75            36            29            27            25

Chicago
----------------------------------------------------------------------------------------
Infant                        22            11             8             7             7
Preschool                    105            61            53            50            46
School-aged                   21            30            24            22            20

Benton County
----------------------------------------------------------------------------------------
Infant                        62            69            61            58            54
Preschool                     98            80            75            73            71
School-aged                   66            60            54            52            50

Linn County
----------------------------------------------------------------------------------------
Infant                        48            34            29            28            26
Preschool                     92            44            41            40            38
School-aged                   49            35            31            30            28
----------------------------------------------------------------------------------------
While currently in both poor and nonpoor areas the gap between demand
and known supply is greatest for both infant and school-aged care,
this condition could worsen in poor areas of our sites as the welfare
reform legislation is implemented.  Given that families on welfare
generally live in poor areas, the increase in demand for child care
resulting from welfare reform will probably be greater in poor areas
than in nonpoor areas.  Thus, for example, while the supply of known
school-aged care in the poor areas of Baltimore City is sufficient to
meet about 36 percent of current demand, assuming no growth in the
known supply, the percentage could decrease to about 25 percent in
fiscal year 2002, when 50 percent of the welfare caseload is required
to participate in work or work-related activities. 

As previously discussed, some of the largest current and future gaps
in the known supply could exist for infants at the four sites.  In
some instances, these gaps are even greater in poor areas than at the
site as a whole.  For example, although we estimated that the known
supply for all of Chicago is sufficient to meet about 16 percent of
current demand for infant care (see table 1), the known supply in
poor areas of Chicago is capable of meeting only 11 percent of demand
(see table 3).  As implementation of the welfare reform legislation
progresses, this figure could drop to 7 percent in fiscal year 2002. 

A gap also exists between the percentage of demand that is met by the
supply of known preschool care overall and the percentage that is met
in different areas.  For example, in Linn County, Oregon, we
estimated the current known supply to be sufficient to meet 74
percent of current demand for preschool care in the entire area. 
However, in poor areas of the county, known supply could be
sufficient to meet only 44 percent of demand, and this figure could
drop to 38 percent in fiscal year 2002 under welfare reform. 


--------------------
\12 In general, we defined poor areas as those census tracts with
median household incomes below $27,750, or slightly over 200 percent
of poverty for a family of four.  We recognize that child care
markets are neither defined by census tracts alone nor completely
segregated so that poor parents purchase care only in poor areas and
nonpoor parents in nonpoor areas.  Research does suggest, however,
that parents prefer to use providers close to their home. 


   LOW-INCOME FAMILIES FACE OTHER
   ISSUES IN ACCESSING CHILD CARE
------------------------------------------------------------ Letter :5

At all of our sites, CCR&R staff or state and local officials cited
other issues that low-income families face in accessing care,
including the price of care, the availability of nonstandard-hour
care, transportation issues, and quality of care.\13


--------------------
\13 In our general discussions with CCR&R staff and state and local
officials about child care issues affecting low-income families, we
assumed low-income families to be those whose annual incomes
qualified them to receive child care subsidies, regardless of whether
or not they received welfare.  Eligibility for child care subsidies
differed in each state we visited. 


      PRICE OF CARE CONSUMES LARGE
      PERCENTAGE OF POOR FAMILIES'
      INCOMES
---------------------------------------------------------- Letter :5.1

At the four sites we reviewed, the price of known child care consumed
a large percentage of household income for low-income families.\14 As
shown in table 4, the median price of full-time infant care as a
percentage of median household income ranged from 16 to 43 percent
for poor families.  The range for full-time care for preschool
children was from 14 to 24 percent, and for school-aged children,
from 8 to 18 percent.\15 These percentages do not take into account
the possibility that some low-income families may receive a child
care subsidy.\16 However, national survey data for 1993, which
include families with and without subsidies, also show that
low-income families who paid for care spent, on average, as much as
18 percent of their income on child care expenses.\17



                                         Table 4
                         
                         Median Weekly Price for Known Child Care
                           in Poor and Nonpoor Areas (Absolute
                           Values and as a Percentage of Sites'
                                 Median Household Income)



                        % of                % of                % of                 % of
                      median              median              median               median
             Price    income     Price    income     Price    income     Price     income
--------  --------  --------  --------  --------  --------  --------  --------  ---------
Baltimore City
-----------------------------------------------------------------------------------------
Infant        $154        38      $147        22       $86        21       $86         13
Preschoo     80-81        20     82-85     12-13        76        19        76         12
 l
School-      43-75     10-18     45-81      7-12     50-75     12-19     50-75       8-11
 aged

Chicago
-----------------------------------------------------------------------------------------
Infant     130-153     37-43   133-155     18-21        85        24        85         12
Preschoo     81-84     23-24     80-81        11     65-80     18-23     70-80      10-11
 l
School-         56        16        45         6        60        17        60          8
 aged

Benton County
-----------------------------------------------------------------------------------------
Infant         121        23       109        13        90        17        90         11
Preschoo        85        16        88        10        79        15        90         11
 l
School-         43         8        32         4        44         8        50          6
 aged

Linn County
-----------------------------------------------------------------------------------------
Infant          97        20       101        17        79        16        79         13
Preschoo        69        14        73        12        68        14        70         11
 l
School-         41         8        43         7        38         8        38          6
 aged
-----------------------------------------------------------------------------------------
Note:  We used 1990 U.S.  Census data to calculate median household
income for poor and nonpoor areas.  We used only those providers that
reported a price in the CCR&R databases in 1996 to calculate the
median weekly price of care. 

The difference in the percentage of household income that the price
of known child care represents for poor and nonpoor families is
almost entirely due to differing median household incomes rather than
differences in the child care prices themselves.  At our four sites,
in most cases, price differences between poor and nonpoor areas were
small and generally less for homes than for centers.\18 For example,
the price of center care for infants in poor areas of Chicago ranged
from $130 to $153 and consumed between 37 and 43 percent of median
household income for poor families.  The price range for infant care
in nonpoor areas was $133 to $155, but the percentage of median
household income consumed was between 18 and 21 percent for nonpoor
families (see table 4). 

CCR&R staff in Oregon and Chicago were surprised by the similarity in
prices of known care in poor and nonpoor areas.  However, national
data show that, while many poor families may secure child care free
of cost, those poor families that do pay for care pay an amount not
significantly different from that paid by nonpoor families.  Hence,
ï¿½...poor families that do pay for child care may compete against more
financially able families for child care services, and hence pay
competitive prices for these services.ï¿½\19

Both CCR&R staff and state and local officials in the four cities and
counties said that the affordability of child care was a barrier for
low-income families in accessing child care.  For example, Oregon
CCR&R staff said that money to buy child care, especially the more
expensive infant care or care for a child with special needs, is as
much an issue for low-income families as is building the supply of
this type of care.  They believe that if parents had more money to
purchase care, more providers would be willing to offer it. 
Officials in Baltimore City and Chicago told us that the
affordability of child care for low-income families depends on the
subsidies they receive.  In Chicago, both CCR&R staff and state
officials told us that subsidy rates are too low for some types of
care and for low-income parents who must compete with families who
have more resources to find care in economically mixed neighborhoods. 
Low subsidies also contribute to high turnover for providers caring
for low-income children and create instability for both children and
parents.  In Baltimore City, however, CCR&R staff believe that their
subsidy rates provide access to quality care for those families that
receive them. 


--------------------
\14 Technically, it is the parents' share of the price of care that
should be measured relative to household income.  However, our
databases contained only the total price charged by the provider. 
These two numbers will differ to the extent that child care is
subsidized by a third party. 

\15 For those providers that provided hourly rates instead of weekly
ones, we assumed full-time care for infants and preschoolers to be 45
hours per week and full-time care for school-aged children to be 25
hours per week. 

\16 Our previous work and that of others has shown that many eligible
families do not receive child care subsidies, mostly because of state
funding constraints.  See Child Care:  Working Poor and Welfare
Recipients Face Service Gaps (GAO/HEHS-94-87, May 13, 1994). 

\17 U.S.  Bureau of the Census, What Does It Cost to Mind Our
Preschoolers?  Current Population Reports, P70-52 (Washington, D.C.: 
U.S.  Government Printing Office, 1995). 

\18 With a few exceptions, these differences ranged from
approximately $1 to $5 a week for centers and from $0 to $3 per week
for homes.  However, in a few instances, price differences were
larger between the areas.  For example, the median price for
school-aged care in Chicago was $56 per week in poor areas as
compared with $45 per week in nonpoor areas, and the price of
preschool family day care was $79 in poor areas of Benton County and
$90 in nonpoor areas. 

\19 Bureau of the Census, Who's Minding the Kids?  Child Care
Arrangements:  Fall 1991, Survey of Income and Program Participation
(Washington, D.C.:  U.S.  Department of Commerce, 1994) p.  23. 


      FEW PROVIDERS OFFER
      NONSTANDARD-HOUR CARE
---------------------------------------------------------- Letter :5.2

Given their often limited education and low skill levels, many
parents moving from welfare to work may become employed in jobs with
nonstandard-hour work schedules, such as jobs that have rotating
shift or weekend hours, for example.\20 \21 These types of jobs
include cashier, retail salesperson, and janitor.  Finding child care
during nonstandard work hours may prove challenging, however.  Our
previous work examining the use of child care under the JOBS program
found that state and local officials were having difficulty finding
child care during nonstandard hours for the children of AFDC parents
participating in the JOBS program.\22

At the four sites we reviewed, fewer providers offered
nonstandard-hour care as compared with other types of care:  The
percentage of providers that offered nonstandard-hour care ranged
from 12 percent to 35 percent.  Providers that offered
nonstandard-hour care were predominantly family child care homes, not
centers, which have significantly greater capacity than homes. 
Appendix II provides detailed data on the number and type of
providers offering this type of care by site. 


--------------------
\20 U.S.  Congressional Research Service, Jobs for Welfare Recipients
(Washington, D.C.:  Library of Congress, May 13, 1994), pp.  2-5. 

\21 Presser, H., Jobs, Family, and Gender:  Determinants of
Nonstandard Work Schedules Among Employed Americans in 1991 (College
Park, Md.:  Center of Population, Gender, and Social Inequality,
University of Maryland, 1995). 

\22 GAO/HEHS-95-220, Sept.  21, 1995, p.  4. 


      TRANSPORTATION ISSUES AFFECT
      ACCESSIBILITY OF CHILD CARE
---------------------------------------------------------- Letter :5.3

Transportation is another critical issue for welfare families in
accessing child care.  As we previously reported, in a nationwide
survey of local JOBS program officials, 23 percent stated that they
could not meet the child care needs of all their participants, and 77
percent of these reported that this was because of transportation
problems.  States reported that JOBS participants did not have
reliable private transportation to get their children to child care
providers and then to get themselves to work.  Moreover, some
communities lacked the necessary public transportation to get
participants where they needed to go, especially in rural areas.\23

CCR&R staff at all four of the sites reviewed also stated that lack
of transportation created barriers for low-income families in
obtaining child care.  In addition to the transportation issues cited
above, CCR&R staff in Chicago and Oregon said that transportation of
school-aged children between school and their after-school provider
was a problem. 


--------------------
\23 GAO/HEHS-95-220, Sept.  21, 1995, p.  9. 


      STATES AND CCR&RS HAVE
      CONCERNS ABOUT CHILD CARE
      QUALITY
---------------------------------------------------------- Letter :5.4

Whether provided in centers or family child care homes, child care of
acceptable quality is care that nurtures children in a stimulating
environment, safe from harm.  Research has documented that elements
in a child care setting that are associated with an acceptable level
of quality include trained providers, small group sizes, low
child-to-staff ratios, and low staff turnover, to name a few. 
Research over many years also has documented the importance of the
quality of care to all aspects of a child's healthy
development--physical, cognitive, emotional, and social. 

CCR&R staff and state and local officials at all four sites told us
they were concerned about the quality of care that low-income
families are able to access.  For example, CCR&R staff in Oregon said
that, given the numerous constraints faced by low-income families,
including low wages, less flexible hours, and a lack of
transportation, many low-income parents have limited child care
choices, which decreases their chances of finding care of acceptable
quality.  In fact, one Oregon state official believes that the supply
of child care will be less of a critical issue under welfare reform
than the quality of the care parents access.  In Baltimore City,
CCR&R staff and state and local officials were concerned about
low-income families not having access to care of acceptable quality
unless they had access to child care subsidies with which to purchase
such care.\24

Chicago CCR&R staff expressed similar concerns and also said that the
subsidy rates for some types of care in Chicago are too low to
purchase child care of an acceptable level of quality. 


--------------------
\24 At the time of our review in Baltimore City, Maryland, CCR&R
staff and state and local officials stated that many families could
not get child care subsidies because of a lack of state funds and
were on a waiting list.  However, comments provided by CCR&R staff
and Maryland state officials on our draft report indicated that this
situation had changed.  More state and federal money has become
available for child care subsidies, and, as a result, Maryland has
eliminated its waiting list for such subsidies. 


   CONCLUDING OBSERVATIONS
------------------------------------------------------------ Letter :6

The availability of child care will be a key factor in the degree to
which states and the federal government succeed in helping welfare
families become more financially self-sufficient.  On the basis of
our review of four sites, it seems likely that increases in the
supply of child care will be needed to meet the estimated increase in
demand for care as welfare reform is implemented.  Questions remain,
however, about which segments of the child care market these
increases will come from; how much care will be needed; and whether
or not states and localities can effectively help increase the supply
where it is most needed.  The answers to these questions, for our
sites and other communities as well, depend on factors such as the
following: 

Proportion of demand currently being met:  If states' current supply
of child care is sufficient to meet or exceed current demand, an
increase in demand over time may not be a problem.  The growth in the
supply of child care experienced by an area may match the demand. 
However, if the current supply of care is quite low relative to the
demand, as our estimates showed for infant care at our selected
sites, and demand increases with welfare reform, it is possible that
the growth in total supply might not be quick enough to meet the
increase in the short term. 

Ability of states to affect supply:  While the supply of child care
is expected to grow in response to more demand, states and
communities can, for the most part, directly reach only those
providers known to the states.  With the information available from
these providers, the state can target them in its supply-building
activities, if needed.  Such activities could include providing
incentives or subsidies, or making regulatory changes in an effort to
directly increase the supply overall or for a particular type of
care.  The bigger challenge for states and localities will be
increasing the supply of care unknown to the states, such as that
provided by friends, neighbors, and especially relatives, which is
chosen by many parents to meet their child care needs.  Information
on these providers, however, is limited. 

Age of children needing care:  The new federal law dramatically
changes which welfare parents are required to find work.  Previously,
that group consisted of parents whose youngest child was 3 years old
or older; now, the work requirement applies to the entire welfare
population, except for parents with children 1 year old or younger. 
Young children are primarily cared for in a provider's home; a
significant number of these providers are relatives, particularly in
low-income families.  Hence, the increase in demand for care for very
young children caused by the new law could place the greatest strain
on the supply of family child care providers and relative care. 
Information about family child care providers is limited because many
are unknown to the states; furthermore, their individual capacity
typically is limited.  In addition, states and local governments
generally have little information available on relative care. 
States' inability to directly expand the capacity of these types of
providers could pose significant obstacles to communities in their
efforts to ensure that their child care supply meets the needs of
their welfare parents. 

Price of care:  The price of child care can have a positive effect on
building supply, assuming that the amount parents are able and
willing to pay is high enough to attract more providers to the
market.  On the other hand, the higher the price of child care, the
less affordable care becomes for low-income families, especially for
those without child care subsidies.  Data from our sites as well as
national data show that child care, especially infant care, consumes
a high percentage of household income for poor families.  As a
result, child care subsidies could become critical to low-income
families' ability to afford care and, as officials in some of our
sites stated, buy quality care.  However, the extent to which states
have the resources to provide subsidies to greater numbers of
eligible families and whether or not the amount of those subsidies
will be high enough to build supply are not known at this time. 

The way in which these four factors interact in each market, and the
extent to which states and localities can influence these factors,
will affect the expansion of child care supply, which is important to
welfare parents who are making the transition to work. 


   COMMENTS FROM HHS, STATES, AND
   CCR&RS AND OUR EVALUATION
------------------------------------------------------------ Letter :7

We obtained comments on a draft of this report from HHS and state and
CCR&R child care officials from the four areas reviewed in this
report.  HHS officials said that the report's findings reflect some
of the child care issues they have heard across the country, such as
the gap between the supply of and demand for infant and school-aged
child care; the current inadequacy of supply that states and
communities face, particularly in low-income areas; and the
significant portion of a low-income family's income that child care
consumes.  HHS officials also noted that the report reinforces
earlier GAO work regarding difficulties that state and county
administrators have had in serving the child care needs of welfare
parents participating in the JOBS program.  They also believe that
the report is a useful next step in identifying the crucial role
child care plays in the lives of working families.  HHS' written
comments appear in full in appendix III. 

Some CCR&Rs and state officials expressed several concerns related to
our not including unregulated child care in the scope of our review. 
First, by excluding such care, they said, the report understates the
importance and significance of unregulated care in meeting the child
care needs of welfare recipients.  The officials went on to say that
caregivers such as relatives, friends, and neighbors currently meet
the needs of many parents, particularly low-income parents, and that
these providers will be an important source of supply as demand grows
in response to welfare reform.  Although our report focuses on known
family child care homes and centers, we recognize the important role
that other types of care play in meeting child care demand.  The
scope of our review was limited to known care only because of
methodological constraints in attempting to measure the total supply
of care:  As we state in the report, care both known and unknown to
the states will be important in filling the estimated gap between
known supply and future demand.  In response to these comments, we
have revised the report to further acknowledge the importance of
other types of care. 

Some CCR&Rs and state officials also believed that our estimates of
future demand for child care were based on an assumption that parents
would use only family child care homes or center care.  In reality,
our estimates of future demand for care were based on the assumption
that parents will use all types of child care in the same proportions
as they are currently using them.  Thus, we compared the supply of
known family child care homes and centers with only the demand for
family child care homes and centers. 

Finally, CCR&Rs and state officials believed that our discussion of
the quality of child care accessed by low-income populations
suggested that quality care is associated only with known care that
is regulated.  This was not our intent.  Our discussion represents
comments made by CCR&R staff and state and local officials in
response to questions we asked to answer the second review objective: 
to identify other challenges, besides possible gaps between supply
and demand, that low-income families face in accessing child care. 
The challenges mentioned most often by these officials included
issues about child care quality and affordability, as well as the
availability of nonstandard-hour care and transportation, all of
which are discussed in the latter part of the report. 

HHS, the states, and CCR&Rs also provided technical comments, which
we addressed in the report, as appropriate. 


---------------------------------------------------------- Letter :7.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days
from the date of this letter.  At that time, we will send copies of
this report to the Secretary of Health and Human Services; the
Chairmen and Ranking Minority Members of the House Committees on Ways
and Means and Education and the Workforce; and the Chairmen and
Ranking Minority Members of the Senate Committees on Finance and
Labor and Human Resources.  We will also make copies available to
others on request. 

If you or your staff have any questions about this report, please
contact me on (202) 512-7125.  Other staff who contributed to this
report are listed in appendix IV. 

Sincerely yours,

Mark V.  Nadel
Associate Director
Income Security Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

This appendix provides more detail about the methods we used to
arrive at our estimates of the supply of and demand for child care at
our four sites.  Our measurement of the gap between the current known
supply and current, as well as future, demand for family child care
homes and centers is based on a static model of an inherently dynamic
process.  As the demand for child care increases, economic theory
would predict that over time the supply of care will increase as
well, until the two are once again in equilibrium.\25 Our model
provides a snapshot of a point in time at which demand has increased
but supply has not yet moved to meet it.  Thus, we are able to
identify, for these four sites, the amount of specific types of known
child care and where it is located, and to predict where care will be
needed in the future. 

We performed our work between April and December 1996 in accordance
with generally accepted government auditing standards.  We did not
independently verify the child care supply data provided by the child
care resource and referral agencies (CCR&R). 


--------------------
\25 Economic theory also would predict that if the child care supply
curve was upward sloping, the price of care would rise as the demand
for care increased.  This would make measuring the gap between supply
and demand even more difficult, since we would also have to take into
account changing prices.  Our model of the child care market assumes
that the long-run supply curve for child care is essentially
horizontal; that is, the price of care does not increase with an
increase in demand.  While this assumption might be unusual for more
standard commodities, it is a fair description of the behavior of the
child care market in recent years.  While the demand for child care
has increased dramatically, the price of care, adjusted for
inflation, has remained approximately the same. 


   SUPPLY DATA
--------------------------------------------------------- Appendix I:1

The starting point for our work was the databases provided by the
three CCR&Rs for the four sites reviewed:  Baltimore City, Maryland;
Chicago, Illinois; and Benton and Linn counties, Oregon.\26 We used
site-specific supply data instead of nationwide data because local
supply data were more readily available, current, and comprehensive,
thus improving the accuracy of our estimates.  Additionally,
site-specific supply data were needed to be able to examine supply
differences between poor and nonpoor areas.\27


--------------------
\26 The Child Care Bureau at the Administration for Children and
Families, U.S.  Department of Health and Human Services (HHS), and
the National Association of Child Care Resource and Referral Agencies
helped identify a potential list of sites. 

\27 Child care supply data for Baltimore City were provided by the
Maryland Committee for Children, Inc., a private, nonprofit,
community organization.  Its database contains information on
regulated child care and early education programs throughout
Maryland, the District of Columbia, and Northern Virginia.  Data for
Benton and Linn counties, Oregon, were provided by Family
Connections, a CCR&R located at Linn and Benton County Community
College.  Chicago data were provided by the Day Care Action Council,
Chicago, Illinois.  All three CCR&Rs are members of the Child Care
Research Partnerships funded by the Child Care Bureau in HHS. 


      IDENTIFYING AND CLASSIFYING
      PROVIDERS
------------------------------------------------------- Appendix I:1.1

The CCR&Rs' databases included a wealth of information about
currently active known child care providers in their service delivery
areas, including their hours of operation, the ages of children that
they care for, and the fees that they charge.  We first designated
each child care provider in each database as either a center or a
family day care provider.  From the original classifications provided
by the CCR&Rs, our definition of center care included a broad and
diverse range of full- and part-time programs, such as Head Start and
Maryland's Extended Elementary Education Program; our definition of
family day care included both family day care and group homes.\28
Providers that did not fall into one of these categories, such as
summer camps and providers of care during vacation time only, were
excluded from our analysis.  In addition, we excluded parental care,
relative care, and care provided in the child's own home. 

We further identified each provider in each database by the ages and
number of children it was willing or licensed to care for.  We
grouped children into three age categories:  infants, birth to 23
months; preschool, aged 24 to 71 months; and school-aged, aged 6
through 12 years.  We also identified those providers that were
qualified to care for children with special needs and those who were
willing to care for children during nonstandard work hours, such as
on the weekend, or before 6 a.m.  and after 6:30 p.m. 


--------------------
\28 Group homes were defined as family day care homes that are
licensed to care for between 10 and 12 children. 


      DETERMINING CHILD CARE
      CAPACITY
------------------------------------------------------- Appendix I:1.2

The CCR&R databases varied, across sites and types of providers, with
respect to the information they contained on the capacity of each
child care provider.\29 Capacity data by each age group were
available at all four sites for center-based care.  However, such
data for family child care were not always available from each site. 
In Chicago, capacity data for each age group were available for
family child care.  However, in Baltimore City, only data on total
capacity and infant capacity were available separately for family
child care.  After subtracting the infant capacity from the total
capacity, we had to estimate preschool and school-aged capacities
from the remainder using a formula we developed.  This formula was
based on the assumption that the ratio of preschool to school-aged
children varied slightly depending on the number of infants who were
receiving care in the home.\30 In Benton and Linn counties in Oregon,
data for home-based care were available only on total capacity. 
Because we didn't have any information specifically on infant
capacity for each provider in these counties, we assumed that every
provider that accepted infants had a maximum infant capacity of 1. 
We then subtracted this estimated infant capacity from the total
capacity and applied the same formulas used on the Baltimore City
data to the remainder to estimate preschool and school-aged
capacities. 


--------------------
\29 At all four sites, center capacity is the maximum number of
children allowed at the center by the state.  This same definition of
capacity is used for family child care homes for Chicago and
Baltimore City.  For family child care homes in Benton and Linn
counties, capacity is the number of children the provider is willing
to accept, within the legal limit. 

\30 We developed the following formula on the basis of discussions
with CCR&R officials about the average capacity by age among their
provider populations.  If infant capacity was 2, the preschool to
school-aged ratio was .66/.33; if infant capacity was 1, the ratio
was .71/.29; if infant capacity was 0, the ratio was .75/.25. 


   DEMAND DATA
--------------------------------------------------------- Appendix I:2

To estimate total demand for family child care homes and centers at
our four sites, we needed to know the number of children through age
12, the percentage of those children with working mothers, and the
percentage of children who used either center care or family day
care.  We therefore used data from a number of different sources,
including the 1990 U.S.  Census, a 1994 update to the Census, the
1995 Current Population Survey (CPS), as well as two surveys of child
care usage--the Survey on Income and Program Participation (SIPP) and
the National Child Care Survey (NCCS).  Because these surveys do not
identify whether parents are using care that is known or unknown to
the states, we had to estimate total demand for center and family day
care. 


      ESTIMATING NUMBER OF
      CHILDREN AGED 12 AND UNDER
------------------------------------------------------- Appendix I:2.1

Our estimate of demand for care starts with data from the 1994 update
to the U.S.  Census on the number of children aged 12 and under
living at each of our four sites, reported by single year of age.  We
also collected age-specific data from the local welfare offices at
each of our four sites on the number of children aged 12 and under
who were on the welfare rolls in 1995 or 1996.  We then subtracted
these welfare numbers from the 1994 population numbers to create an
estimate of the number of nonwelfare children by single year of age
in each site. 


      ESTIMATING NUMBER OF
      CHILDREN WITH WORKING
      MOTHERS AND NONWORKING
      MOTHERS
------------------------------------------------------- Appendix I:2.2

The 1995 CPS provided the percentage of children, at each age, with
working and nonworking mothers in each state.  We then applied these
state-specific percentages to the number of nonwelfare children
determined above, to project numbers of nonwelfare children, at each
age, with working and nonworking mothers at each site.  Because of
methodological constraints, the children on the welfare rolls were
all assumed to have nonworking mothers, although we recognize that
some mothers on welfare also work.  We added the number of children
on welfare to the estimate of children of nonwelfare, nonworking
mothers to arrive at an estimate of total number of children with
nonworking mothers. 


      ESTIMATING PERCENTAGE OF
      CHILDREN USING CENTERS AND
      FAMILY DAY CARE
------------------------------------------------------- Appendix I:2.3

We based our estimates of the percentage of children at each age
using center care or family day care, respectively, on two different
national surveys.  We used the 1993 SIPP data to determine the
percentage of children from birth to age 4 using center care and the
percentage using family day care.  Because the SIPP data had been
collected only for working mothers, we had to estimate a usage rate
for the children of nonworking mothers as well.  To do this, we used
1990 NCCS data, which included both working and nonworking mothers in
the sample, to create a ratio of the child care usage rates of
children of nonworking mothers to those of working mothers, at each
age from birth through 12, for center and family day care separately. 
We multiplied these ratios by the usage rates for children of working
mothers from the SIPP to impute usage rates for children of
nonworking mothers in 1993. 

Because of a design flaw in the questionnaire, the 1993 SIPP data
seriously underestimate child care usage rates of school-aged
children.\31 Therefore, we used the 1990 NCCS data to determine the
percentage of children aged 5 through 12, with working and nonworking
mothers, who used center care and family day care.  To compensate for
the difference in child care use patterns between 1989-90 and 1993,
we applied an adjustment factor to the NCCS data equal to the
percentage change in the estimates of center care and family day care
use between 1988 and 1993 SIPP data to inflate these 1990 figures to
what they would have been in 1993.\32


--------------------
\31 Census Bureau analysts reported that the SIPP child care
questionnaire has since been revised to better capture the child care
usage of school-aged children. 

\32 Before 1993, the SIPP data were collected in 1988 and then again
in 1991.  The NCCS data were collected in 1989-90.  We determined
that it was better to use the 1988 SIPP and possibly overestimate the
change in usage rates, rather than use the 1991 data and run the risk
of underestimating the change. 


      ESTIMATING NUMBERS OF
      CHILDREN USING CENTERS AND
      FAMILY DAY CARE
------------------------------------------------------- Appendix I:2.4

We then multiplied our estimates of the percentages of children using
each type of child care, at each age, by the estimated number of
children at each age at each site to yield an estimate of the number
of children, at each age, expected to be in each type of care.  This
is our estimated demand for child care.\33


--------------------
\33 Because of data limitations, our calculations underestimate the
number of nonwelfare mothers who are working and overestimate the
number who are not working.  At the same time, our calculations
overestimate the number of welfare mothers who are not working by
assuming that all welfare mothers do not work. 


   ESTIMATING PERCENTAGE OF DEMAND
   THAT COULD BE MET BY SUPPLY OF
   KNOWN CHILD CARE
--------------------------------------------------------- Appendix I:3

Having developed estimates of the supply of known family child care
homes and centers at our four sites and the demand for these types of
care, our final step was to compare, for each age category, the
estimated number of child care spaces available and the estimated
number of children requiring each type of care for each site.  The
difference between these two estimates is defined as the gap between
the current supply of known family child care homes and centers and
the total demand for these types of care at each site.  The ratio of
the number of spaces available to the number of spaces demanded is
defined as the estimated percentage of demand for center and family
child care that could be met by the estimated current supply of known
care.  We calculated this percentage for child care overall, as well
as for age-specific child care, at each site. 


   ESTIMATING NEW DEMAND UNDER
   WELFARE WORK REQUIREMENTS
--------------------------------------------------------- Appendix I:4

To project the possible new demand created as a result of welfare
reform, we assumed that the percentage of children currently on the
welfare rolls who would need child care under welfare reform would be
equal to the percentage of mothers moving from welfare to the
workforce.  At every age, we estimated that 25 percent, 35 percent,
or 50 percent of the children would need child care because their
mothers were now required to work or participate in work-related
activities.  These percentages are based on the work requirements of
the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 for 1997, 1999, and 2002 . 

We then compared these estimates of the demand for child care after
the welfare reform work requirements go into effect with the
previously estimated supply of known child care at each site.  We
made these comparisons for age-specific categories of child care as
well as for child care as a whole.  These comparisons did not take
into account the natural increase in the supply of care that an
increase in demand would eventually engender.  Our estimate of how
capable the current supply of known child care would be of meeting
the expected increased demand was intended to illustrate how much the
supply of known child care would have to grow to maintain or even
increase the percentage of demand that it currently is capable of
meeting. 


   ESTIMATING POOR AND NONPOOR
   SUPPLY OF KNOWN CARE
--------------------------------------------------------- Appendix I:5

Because the increase in demand for child care resulting from welfare
reform is expected to come primarily from poor parents, the location
of the current supply of child care is a relevant issue.  While child
care markets are not completely segregated so that poor parents
purchase care only within poor areas and nonpoor parents within
nonpoor areas, most parents prefer to use providers who are close to
home.  Further analysis of the total child care demand and supply of
known child care at our four sites involved separating each site into
poor and nonpoor areas. 


      DETERMINING CENSUS TRACTS
------------------------------------------------------- Appendix I:5.1

To categorize providers as being located in either poor or nonpoor
areas at each site, we needed to know the census tract number for the
location or residence of each provider.  Baltimore City's CCR&R
included the census tract number for each provider in its database. 
The databases for both the Chicago and Oregon CCR&Rs, however,
included only the name of the school nearest the location or
residence of each provider.  For Chicago and the two Oregon counties,
we therefore used the Tiger/Census Tract Street Index\34 to determine
the census tract number for the school closest to the provider and
assigned that census tract to the provider.  In cases in which
Chicago providers had not given accurate school information, the
CCR&R released the actual addresses of the providers to us.  With
this information, we were able to determine and assign to each a
census tract number. 


--------------------
\34 The Tiger/Census Tract Street Index is a CD-ROM database that
matches addresses with census tract numbers. 


      DESIGNATING POOR AND NONPOOR
      CENSUS TRACTS
------------------------------------------------------- Appendix I:5.2

We analyzed the census tracts within each site by their median
household income.  In some cases, we also looked at the percentage of
households on welfare in each tract.\35

Each census tract was then designated as either poor or nonpoor.  The
criteria for this designation varied somewhat by site, especially
with respect to the percentage of households on welfare in each
tract.  In general, those census tracts with a median household
income at or below $27,750 (slightly over 200 percent of the federal
poverty level for a family of four in 1995) were defined as being in
poor areas, and those with median household income above $27,750 were
defined as being in nonpoor areas.  This criterion was sometimes
overridden, however, when examined in conjunction with the criterion
on percentage of households on welfare. 


--------------------
\35 These data came from the 1990 U.S Census. 


   ESTIMATING POOR AND NONPOOR
   DEMAND FOR CARE
--------------------------------------------------------- Appendix I:6


      DETERMINING PERCENTAGE OF
      CHILDREN IN POOR AND NONPOOR
      AREAS
------------------------------------------------------- Appendix I:6.1

We used 1990 Census data by census tract for each of the four sites
to estimate the percentages of children from birth through age 12 who
were living in poor and nonpoor areas in each site. 


      DETERMINING PERCENTAGE OF
      CHILDREN WITH WORKING AND
      NONWORKING MOTHERS IN POOR
      AND NONPOOR AREAS
------------------------------------------------------- Appendix I:6.2

The 1995 CPS provided the percentage of poor and nonpoor children
with working and nonworking mothers in each state.  We then applied
these state-specific percentages to the numbers of poor and nonpoor
nonwelfare children for each site to project numbers of nonwelfare
children with working and nonworking mothers separately for poor and
nonpoor areas of each site.  We then included the number of children
on the welfare rolls in the estimate of children in poor areas with
nonworking mothers. 


      NO DIFFERENCE IN CHILD CARE
      USAGE RATES ASSUMED FOR POOR
      AND NONPOOR AREAS
------------------------------------------------------- Appendix I:6.3

Because of data limitations, we estimated that for each child care
setting the usage rates of poor children are the same as those of
nonpoor children.  This is a shortcoming of our methodology, however,
because poor and nonpoor parents use different types of child care at
different rates.  In particular, lower-income parents are more likely
to use relative care, which is either free or much lower in price
than market care (center care and family day care).  However, one
outcome of welfare reform may be a decrease in the availability of
free relative care for this population, since more people, including
perhaps those caregiving relatives, will be required to work.  In
addition, while in the past the increase in demand for child care has
not affected its long-term price, another short-term effect of the
increase in demand for care attributable to welfare reform may be to
drive up the price of care for all parents, but for low-income
parents in particular.  Both of these possibilities may result in
poor parents using more market care than they have in the past. 


      ESTIMATING NUMBERS OF POOR
      AND NONPOOR CHILDREN USING
      CENTERS AND FAMILY DAY CARE
------------------------------------------------------- Appendix I:6.4

We then multiplied our estimates of the percentages of children using
each type of child care at each age by the estimated number of poor
and nonpoor children at each age at each site to yield an estimate of
the number of poor and nonpoor children, at each age, expected to
demand each type of care. 


      ESTIMATING PERCENTAGE OF
      CURRENT AND PROJECTED DEMAND
      THAT COULD BE MET BY CURRENT
      KNOWN SUPPLY IN POOR AND
      NONPOOR AREAS
------------------------------------------------------- Appendix I:6.5

We compared the estimated number of known child care spaces available
within each age category and the estimated number of children
currently demanding each type of care in each age category for each
site.  This was done separately for poor and nonpoor areas.  In
addition, we estimated the new demand for child care in the poor
areas that is likely to be caused by the move of more mothers from
welfare to work using the same rates of labor force participation we
assumed above. 


      CALCULATING MEDIAN WEEKLY
      PRICE OF CHILD CARE BY AGE
      OF CHILD FOR EACH SITE
------------------------------------------------------- Appendix I:6.6

To calculate the median weekly price of child care, we again divided
each site-specific database according to the type of provider (family
day care or center care) and the age category of children each
provider served (infant, preschool, or school-aged).  Where possible,
we identified a full-time weekly price of care for each provider in
each age/type category.  When a full-time weekly price was not
available, we estimated it using the given part-time hourly rate and
a standard number of hours for full-time care of 45 hours for infants
and preschoolers and 25 hours for school-aged children.  If no price
information was available for a specific provider, we dropped it from
the sample when calculating the median weekly price.  Thus, a median
weekly price was calculated for each age category and type of child
care setting, for the total number of child care providers that
provided price information, and for each site. 


CHILD CARE AT FOUR SITES WE
REVIEWED
========================================================== Appendix II


   BALTIMORE CITY, MARYLAND
-------------------------------------------------------- Appendix II:1

Baltimore City has over 700,000 residents and ranks thirteenth among
U.S.  cities in population.  According to the Bureau of Labor
Statistics (BLS), 5.5 percent of Baltimore City's labor force was
unemployed in September 1996.  While 15 percent of the state's
population lives in Baltimore City, about 47 percent of the state's
Aid to Families With Dependent Children (AFDC) caseload, or about
88,000 participants, resides there.  Of the city's AFDC caseload,
about 64 percent, or 56,554, is children 12 and under.  These
children represent 41 percent of the total population of children 12
and under, about 137,000, living in Baltimore City.\36



                               Table II.1
                
                Total Known Providers by Type of Setting
                  in Poor and Nonpoor Areas, Baltimore
                                  City


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 184      52     654      54     838      54
Nonpoor areas              171      48     557      46     728      46
======================================================================
Total                      355     100   1,211     100   1,566     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Centers
include those providers classified as center care, a group program,
or an Extended Elementary Education Program. 



                               Table II.2
                
                 Total Known Providers by Age Group in
                 Poor and Nonpoor Areas, Baltimore City


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 552      53     733      53     629      54
Nonpoor areas              489      47     647      47     529      46
======================================================================
Total                    1,041     100   1,380     100   1,158     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                               Table II.3
                
                Percentage of Known Providers That Offer
                 Care During Nonstandard Hours in Poor
                   and Nonpoor Areas, Baltimore City


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Nonstandard hours                          101      12      94      13
======================================================================
Total                                      838     100     728     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                               Table II.4
                
                   Percentage of Known Providers That
                Currently Provide Special Needs Care in
                 Poor and Nonpoor Areas, Baltimore City


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Special needs                              109      13      90      12
======================================================================
Total                                      838     100     728     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                               Table II.5
                
                 Total Known Provider Spaces by Type of
                   Setting in Poor and Nonpoor Areas,
                             Baltimore City


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas               7,779      50   4,009      53  11,788      51
Nonpoor areas            7,626      50   3,587      47  11,213      49
======================================================================
Total                   15,405     100   7,596     100  23,001     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Centers
include those providers classified as center care, a group program,
or an Extended Elementary Education Program.  Family spaces in
Baltimore City were estimated.  See app.  I for the details of our
methodology. 



                               Table II.6
                
                  Known Spaces for Infants by Type of
                   Setting in Poor and Nonpoor Areas,
                             Baltimore City


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 110      50     935      52   1,045      52
Nonpoor areas              108      50     849      48     957      48
======================================================================
Total                      218     100   1,784     100   2,002     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Centers
include those providers classified as center care, a group program,
or an Extended Elementary Education Program. 



                               Table II.7
                
                 Known Spaces for Preschool Children by
                  Type of Setting in Poor and Nonpoor
                         Areas, Baltimore City


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas               5,877      53   2,121      53   7,998      53
Nonpoor areas            5,231      47   1,884      47   7,115      47
======================================================================
Total                   11,108     100   4,005     100  15,113     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Centers
include those providers classified as center care, a group program,
or an Extended Elementary Education Program. 



                               Table II.8
                
                Known Spaces for School-Aged Children by
                  Type of Setting in Poor and Nonpoor
                         Areas, Baltimore City


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas               1,792      44     953      53   2,745      47
Nonpoor areas            2,287      56     854      47   3,141      53
======================================================================
Total                    4,079     100   1,807     100   5,886     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Centers
include those providers classified as center care, a group program,
or an Extended Elementary Education Program. 


--------------------
\36 The source years for these data and those in the tables that
follow ranged from 1994 to 1996; comparable data for a common point
in time were unavailable.  These data are presented to provide a
general overview of the economic environment and welfare population
of the city. 


   CHICAGO, ILLINOIS
-------------------------------------------------------- Appendix II:2

Chicago has about 2.8 million residents and ranks third among U.S. 
cities in population.  According to BLS, 4.8 percent of Chicago's
labor force was unemployed in September 1996.  While only 24 percent
of the state's population lives in Chicago, about 55 percent of the
state's AFDC caseload, or 351,000 participants, resides there.  Of
the city's AFDC caseload, about 60 percent, or 219,489, is children
12 and under.  These children represent about 40 percent of the total
population of children, about 561,000, living in Chicago.\37



                               Table II.9
                
                Total Known Providers by Type of Setting
                   in Poor and Nonpoor Areas, Chicago


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 432      56     405      39     837      46
Nonpoor areas              343      44     624      61     967      54
======================================================================
Total                      775     100   1,029     100   1,804     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.10
                
                 Total Known Providers by Age Group in
                    Poor and Nonpoor Areas, Chicago


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 382      39     801      46     390      41
Nonpoor areas              608      61     940      54     569      59
======================================================================
Total                      990     100   1,741     100     959     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.11
                
                Percentage of Known Providers That Offer
                 Care During Nonstandard Hours in Poor
                       and Nonpoor Areas, Chicago


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Nonstandard hours                          167      20     225      23
======================================================================
Total                                      837     100     967     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.12
                
                Percentage of Known Providers That Have
                Had Experience Caring for Children With
                Special Needs in Poor and Nonpoor Areas,
                                Chicago


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Special needs                              419      50     371      38
======================================================================
Total                                      837     100     967     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.13
                
                 Total Known Provider Spaces by Type of
                   Setting in Poor and Nonpoor Areas,
                                Chicago


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas              25,529      57   2,645      37  28,174      54
Nonpoor areas           19,107      43   4,417      63  23,524      46
======================================================================
Total                   44,636     100   7,062     100  51,698     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.14
                
                  Known Spaces for Infants by Type of
                   Setting in Poor and Nonpoor Areas,
                                Chicago


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 218      28     927      38   1,145      35
Nonpoor areas              562      72   1,519      62   2,081      65
======================================================================
Total                      780     100   2,446     100   3,226     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.15
                
                 Known Spaces for Preschool Children by
                  Type of Setting in Poor and Nonpoor
                             Areas, Chicago


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas              20,294      55   1,537      38  21,831      54
Nonpoor areas           16,311      45   2,528      62  18,839      46
======================================================================
Total                   36,605     100   4,065     100  40,670     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.16
                
                Known Spaces for School-Aged Children by
                  Type of Setting in Poor and Nonpoor
                             Areas, Chicago


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas               5,017      69     181      33   5,198      67
Nonpoor areas            2,234      31     370      67   2,604      33
======================================================================
Total                    7,251     100     551     100   7,802     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 


--------------------
\37 The source years for these data and those in the tables that
follow ranged from 1992 to 1996; comparable data for a common point
in time were unavailable.  These data are presented to provide a
general overview of the economic environment and welfare population
of the city. 


   BENTON COUNTY, OREGON
-------------------------------------------------------- Appendix II:3

Benton County has about 75,500 residents or about 2 percent of the
state's population.  In September 1996, 2.4 percent of Benton
County's labor force was unemployed.  About 3 percent, or 3,153, of
the state's AFDC population resides in Benton County.  Of the
county's AFDC caseload, about 46 percent is children 12 and under. 
These 1,446 children represent about 12 percent of the total
population, about 11,909, of children living in Benton County.\38



                              Table II.17
                
                Total Known Providers by Type of Setting
                in Poor and Nonpoor Areas, Benton County


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  10      32      54      36      64      35
Nonpoor areas               21      68      96      64     117      65
======================================================================
Total                       31     100     150     100     181     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.18
                
                 Total Known Providers by Age Group in
                 Poor and Nonpoor Areas, Benton County


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  46      35      60      37      48      33
Nonpoor areas               84      65     104      63      99      67
======================================================================
Total                      130     100     164     100     147     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.19
                
                Percentage of Known Providers That Offer
                 Care During Nonstandard Hours in Poor
                    and Nonpoor Areas, Benton County


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Nonstandard hour                            12      19      15      13
======================================================================
Total                                       64     100     117     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.20
                
                 Total Known Provider Spaces by Type of
                   Setting in Poor and Nonpoor Areas,
                             Benton County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 458      33     301      38     759      35
Nonpoor areas              918      67     499      62   1,417      65
======================================================================
Total                    1,376     100     800     100   2,176     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.21
                
                  Known Spaces for Infants by Type of
                   Setting in Poor and Nonpoor Areas,
                             Benton County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  80      44      42      34     122      40
Nonpoor areas              100      56      81      66     181      60
======================================================================
Total                      180     100     123     100     303     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.22
                
                 Known Spaces for Preschool Children by
                  Type of Setting in Poor and Nonpoor
                          Areas, Benton County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 207      34     227      39     434      36
Nonpoor areas              403      66     357      61     760      64
======================================================================
Total                      610     100     584     100   1,194     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.23
                
                Known Spaces for School-Aged Children by
                  Type of Setting in Poor and Nonpoor
                          Areas, Benton County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 171      29      32      34     203      30
Nonpoor areas              415      71      62      66     477      70
======================================================================
Total                      586     100      94     100     680     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 


--------------------
\38 The source years for these data and those in the tables that
follow ranged from 1994 to 1996; comparable data for a common point
in time were unavailable.  These data are presented to provide a
general overview of the economic environment and welfare population
of the county. 


   LINN COUNTY, OREGON
-------------------------------------------------------- Appendix II:4

Linn County has more than 98,000 residents.  As of September 1996,
5.5 percent of Linn County's labor force was unemployed.  While only
3 percent of the state's population lives in Linn County, about 7
percent of state's AFDC caseload, about 7,800, resides there.  Of the
county's recipients, almost half are children 12 and under.  These
children represent about 20 percent of the total population of
children, 18,417, living in Linn County.\39



                              Table II.24
                
                Total Known Providers by Type of Setting
                 in Poor and Nonpoor Areas, Linn County


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                   5      25     114      43     119      42
Nonpoor areas               15      75     150      57     165      58
======================================================================
Total                       20     100     264     100     284     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.25
                
                 Total Known Providers by Age Group in
                  Poor and Nonpoor Areas, Linn County


                                Percen          Percen          Percen
                        Number    tage  Number    tage  Number    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  94      42     113      42     112      44
Nonpoor areas              131      58     158      58     140      56
======================================================================
Total                      225     100     271     100     252     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.26
                
                Percentage of Known Providers That Offer
                 Care During Nonstandard Hours in Poor
                     and Nonpoor Areas, Linn County


                                                Percen          Percen
                                        Number    tage  Number    tage
--------------------------------------  ------  ------  ------  ------
Nonstandard hour                            49      41      53      32
======================================================================
Total                                      119     100     165     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number. 



                              Table II.27
                
                 Total Known Provider Spaces by Type of
                Setting in Poor and Nonpoor Areas, Linn
                                 County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 235      27     638      44     873      37
Nonpoor areas              649      73     822      56   1,471      63
======================================================================
Total                      884     100   1,460     100   2,344     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.28
                
                  Known Spaces for Infants by Type of
                Setting in Poor and Nonpoor Areas, Linn
                                 County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  20      25      92      42     112      37
Nonpoor areas               60      75     129      58     189      63
======================================================================
Total                       80     100     221     100     301     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.29
                
                 Known Spaces for Preschool Children by
                  Type of Setting in Poor and Nonpoor
                           Areas, Linn County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                  71      19     438      44     509      37
Nonpoor areas              298      81     553      56     851      63
======================================================================
Total                      369     100     991     100   1,360     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



                              Table II.30
                
                Known Spaces for School-Aged Children by
                  Type of Setting in Poor and Nonpoor
                           Areas, Linn County


                                Percen          Percen          Percen
                        Spaces    tage  Spaces    tage  Spaces    tage
----------------------  ------  ------  ------  ------  ------  ------
Poor areas                 144      33     108      44     252      37
Nonpoor areas              291      67     140      56     431      63
======================================================================
Total                      435     100     248     100     683     100
----------------------------------------------------------------------
Note:  Percentages are rounded to the nearest whole number.  Family
child care includes group homes. 



(See figure in printed edition.)Appendix III

--------------------
\39 The source years for these data and those in the tables that
follow ranged from 1994 to 1996; comparable data for a common point
in time were unavailable.  These data are presented to provide a
general overview of the economic environment and welfare population
of the county. 


COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
========================================================== Appendix II



(See figure in printed edition.)



(See figure in printed edition.)


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
========================================================== Appendix IV

GAO CONTACTS

David P.  Bixler, Assistant Director, (202) 512-7201
Janet L.  Mascia, Evaluator-in-Charge, (202) 512-7263

ACKNOWLEDGMENTS

In addition to those named above, the following individuals made
important contributions to this report:  Alicia Puente Cackley,
Suzanne Sterling, and Rodina Tungol assisted in designing the job,
conducting interviews, analyzing data, and writing the report; James
Wright and Joel Grossman provided design support; Joan Vogel and Bob
DeRoy conducted computer programming; and Steve Machlin provided
statistical advice regarding our data analysis. 


RELATED GAO PRODUCTS
=========================================================== Appendix 0

Early Childhood Programs:  Multiple Programs and Overlapping Target
Groups (GAO/HEHS-95-4FS, Oct.  31, 1995). 

Welfare to Work:  Child Care Assistance Limited; Welfare Reform May
Expand Needs (GAO/HEHS-95-220, Sept.  21, 1995). 

Early Childhood Programs:  Many Poor Children and Strained Resources
Challenge Head Start (GAO/HEHS-94-169BR, May 17, 1995). 

Early Childhood Centers:  Services to Prepare Children for School
Often Limited (GAO/HEHS-95-21, Mar.  21, 1995). 

Child Care:  Child Care Subsidies Increase Likelihood That Low-Income
Mothers Will Work (GAO/HEHS-95-20, Dec.  30, 1994). 

Child Care:  Promoting Quality in Family Child Care (GAO/HEHS-95-93,
Dec.  9, 1994). 

Child Care:  Working Poor and Welfare Recipients Face Service Gaps
(GAO/HEHS-94-87, May 13, 1994). 

Infants and Toddlers:  Dramatic Increases in Numbers Living in
Poverty (GAO/HEHS-94-74, Apr.  7, 1994). 

School-age Demographics:  Recent Trends Pose New Educational
Challenges (GAO/HRD-93-105BR, Aug.  5, 1993). 

Poor Preschool-aged Children:  Numbers Increase but Most Not in
Preschool (GAO/HRD-93-111BR, July 21, 1993). 

Child Care:  States Face Difficulties Enforcing Standards and
Promoting Quality (GAO/HRD-93-13, Nov.  20, 1992). 

Early Childhood Education:  What Are the Costs of High-Quality
Programs?  (GAO/HRD-90-43BR, Jan.  24, 1990). 


*** End of document. ***