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The Child Development and Care Subsidy: Challenges and Opportunities

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By William D. Lopez, Karen A. Kling, & Amanda Nothaft


Access to high-quality, affordable, and reliable child care is essential to economic stability and mobility for families. In Michigan, finding and paying for child care is a major challenge for parents across all socioeconomic levels, with unique challenges for families with low incomes. The Child Development and Care (CDC) subsidy program, funded by the state of Michigan, provides child care subsidies for eligible families and oversight of state child care licensing procedures. The program is administered by the Michigan Department of Education (MDE) and supported by the Michigan Department of Health and Human Services (MDHHS). Child care subsidies have been shown to increase parental employment, particularly among single mothers, and to increase the quality of care acquired by families for their children. Recognizing the important role such subsidies play in preventing and alleviating poverty, in 2021 the State of Michigan directed funding from the American Recovery Plan Act toward the Child Development and Care Subsidy Program to increase the number of eligible families receiving the subsidy.

Despite the clear benefits of the CDC subsidy, many families who meet eligibility criteria are not applying for the subsidy, while other families who apply and receive the subsidy do not use it. With the high cost of child care, why aren’t more families attempting to access and utilize state funds to pay for it?

To better understand this issue, we launched the Barriers to Benefits study in January 2022. The study includes 1) an analysis of statewide child care availability data and 2) interviews with parents and child care providers to better understand when and why families do or do not access the CDC subsidy.

Drawing on administrative data from the MDHHS Greenbook Report of Key Program Statistics, Michigan’s Great Start to Quality system, and the United States Census Bureau’s American Community Survey, we first examined how many children were eligible to receive the CDC subsidy, and, of those children, how many received it. Additionally, we examined how many child care slots were available and how many children used the vouchers they received.

To better understand the experiences of parents, we conducted 41 interviews with parents of children under the age of 18 and professionals who worked for organizations that provided child care, supported the operations of child care centers, or advocated for child care resources. The interviewees were from rural communities in Emmet County, semi-urban and suburban communities in Washtenaw County, and urban areas in Wayne County. All names used here are pseudonyms. Participants identified as 76% White, 7% Black, 7% Hispanic or Latino, and 10% as Other.

Key Findings

  • In Michigan, there are about four children for every available childcare spot. The areas with the least childcare availability are often rural and concentrated in northern Michigan.  
  • Child care can be impossible to find in areas in which available employment options require flexible schedules, like servers in restaurants or seasonal tourism. That individuals often need child care to find employment – but, with a few exceptions, need employment to receive the CDC subsidy – was a frustrating “catch-22” for parents.
  • Interviewees mentioned facing several barriers when applying for the CDC subsidy, including extensive paperwork requirements, language barriers, distrust of the government, and reliance on internet-based applications.

Download PDF for full policy brief