Child Care Subsidy Eligibility and Uptake in New Mexico After Policy Expansion

• In Event: Support or Strain? The Real-World Impact of Family Policy on Health, Care, and Work

Abstract

Introduction: It has been consistently documented that the Child Care and Development Fund (CCDF) serves only a small fraction of eligible children nationwide (15%; Chien, 2024). The CCDF program subsidizes the cost of childcare for eligible children and is the primary policy lever by which state and federal policymakers can address childcare access barriers for lower income families. The relatively low uptake of CCDF benefits has been attributed to factors including funding limitations, administrative burdens, and limited family awareness about the program (e.g. Shlay, 2004; Herbst, 2008). This study examines subsidy uptake in the context of New Mexico, which has made unprecedented efforts to expand families’ access to childcare subsidies. Since 2021 the state has expanded CCDF eligibility to 400% of the federal poverty level or FPL (now $106,600 annually for a family of three), eliminated family copayments for care, and increased provider reimbursement rates based on a cost model estimating the actual costs of providing high-quality care. Further, the state has funded its CCDF program sufficiently that there is no waiting list. New Mexico therefore provides a valuable setting to study CCDF uptake in a context where several documented access barriers have been reduced through policy change and increased funding.

Methods: This analysis examines changes to the pool of CCDF-eligible families in New Mexico across key policy junctures, alongside analyses of actual uptake and changes in the characteristics of families served by the subsidy program. Eligibility estimates were conducted using the Urban Institute’s ATTIS model, and actual uptake was drawn from New Mexico administrative data. Analyses were conducted at the state level and in substate areas (Census-designated PUMAs), with attention to changes in the percentage of eligible families served by the subsidy program and disaggregation by characteristics including race/ethnicity, household income, number of household adults, disability status, and rurality.

Results: The number of New Mexico children eligible for CCDF subsidies increased by approximately 70% between 2019 and 2023, while the number of children served increased by 39%. The composition of the enrolled population remained similar on dimensions of race/ethnicity and rurality, while shifting to include more households with multiple adults and those with incomes in the newly eligible range. Families with incomes above 200% FPL comprised about 1% of subsidy-receiving families in 2019, increasing to 24% in 2023. While the number of children served increased sharply during the study period, the dramatic eligibility expansion meant the percentage of eligible children served decreased.

Implications: Findings from New Mexico provide unique insight into family uptake of CCDF subsidies in a context where funding and eligibility constraints have been substantially reduced. The study also provides the first-ever opportunity to study CCDF uptake among middle-income families, who have not previously been eligible for the program in other states and time periods. Results suggest that subsidized child care is appealing to middle income families when they are made eligible for it, although New Mexico’s program continues to primarily serve families with incomes below 200% FPL.

Authors

• Hailey Heinz, University of New Mexico
  Non-Presenting Co-Author

• Andrew L. Breidenbach, University of New Mexico
  Presenting Author