Changes in Subsidized Child Care after California’s Expansion of Subsidized Slots and Public Preschool

• In Event: Subsidized Child Care in Varying State Policy Contexts: Evidence from Administrative Data

Abstract

Following the state’s 2020 Master Plan for Early Learning and Care, California’s early care and education landscape has shifted substantially in recent years. This paper examines:

1. Effects on subsidized families of the staggered implementation over 2021-2025 of one year of prekindergarten through local schools. How many age-eligible four year olds leave or reduce hours (full-time to part-time) in subsidized care at the start of the school year? Do they return in the summer months? Does the number of subsidized younger children increase commensurately? Do effects grow over time as families learn about the new option and providers adjust their business models?

2. Changes to the composition of the subsidized population as the state expanded funding and slots between 2020 and 2024, adding an additional 130,000 slots. How has access among low- and moderate-income families changed, now that the caseload of subsidized children has grown from about 60,000 to 140,000? Which portions of the low-income population have benefited most from the expansions?

3. The broader safety net for subsidized families. How often do families who are able to access subsidies combine child care with cash and food assistance benefits, and with employment? By how much does the picture change if we look over the first five years of a child’s life instead of at a point in time?

Our research brings together state administrative data from 2015-2025 on the universes of CCDF and SNAP participants, and adds SSI and TANF benefits, UI-covered quarterly earnings and UI benefits data for SNAP participants.

As of the 2025-26 school year California has made a full year of prekindergarten available to all 4-year-olds whose birthdays fall before the September 2nd cutoff. However, the picture is complicated by other key policy changes including reducing required family co-payments, increasing overall funds, and increasing subsidized rates. Together, these changes are hypothesized to have countervailing effects for subsidy-eligible families, with subsidy policy changes increasing affordability and supply and prekindergarten providing a competing, free option.

The research employs quantitative methods to provide insights into these countervailing effects. For the first research question, we leverage birth dates to identify children who become age-eligible for prekindergarten, combining this with school start dates and the phase-in of prekindergarten eligibility. We control for county-level age-based rate changes and use year indicator variables to net out statewide changes. For the second question, we examine caseload flows more broadly, describing changes in the size and characteristics of entering and exiting children. For the third question, we link CCDF subsidy data to SNAP, SSI, and TANF benefits, to quarterly UI-covered wages, and to UI benefits, describing patterns of engagement with the safety net and with employment. For all questions, we consider key geographic and demographic variation.

Assessing impacts across the systems that serve families and children is critical as the system is evolving: the state faces resource constraints, providers need sustainable business models, and families benefit from robust choices. This research leveraging administrative data helps policymakers to understand access more broadly across recent investments in ECE.

Authors

• Brett Guinan, Public Policy Institute of California
  Presenting Author

• Patricia Malagon, Public Policy Institute of California
  Non-Presenting Co-Author

• Caroline Danielson, Public Policy Institute of California
  Non-Presenting Co-Author