Child Care Assistance Spending and Participation in 2018

By Alycia Hardy

Although all children should have access to affordable, high-quality child care, families across the country struggle to afford the high costs while child care workers are paid poverty-level wages. To assist working parents with low incomes, states provide child care assistance directly to families. The Child Care and Development Block Grant (CCDBG) is the primary federal funding source for child care subsidies to families with low incomes as well as for improving child care quality for all children. In addition to CCDBG funds, states provide additional child care assistance funding through other sources described later, including the Temporary Assistance for Needy Families (TANF) block grant. This fact sheet analyzes national trends for spending and participation in CCDBG- and TANF-funded child care in federal fiscal year (FY) 2018, the latest year for which data are available.

In FY 2018, federal funding for CCDBG increased by a historic $2.4 billion, the largest increase in the program’s history. These funds were intended to fully fund CCDBG’s 2014 reauthorization and increase access to child care assistance. However, since states have multiple years to spend funds, the impact of the increase is not fully reflected in the analysis below. This investment was a critical step in helping more working families with low incomes access affordable child care. However, improving the health, safety, and quality of child care—as well as addressing the steep decline in the number of children served—will require significantly greater, continuous federal and state investments. 

The global health crisis caused by the COVID-19 pandemic has further elevated the urgency to increase investments in child care. COVID-19’s devastating impacts have rippled through the child care system, creating widespread provider closures, record unemployment, and increased underemployment, as well as exacerbating existing racial and economic inequities. Policymakers must make additional investments to ensure the health and safety of children, families, providers, and workers—and to secure our nation’s economic stability. Given the delay in the release of data publicly, this analysis does not reflect the impacts of COVID-19.