By Caroline Danielson and Tess Thorman in June 2019

High-quality child care and preschool programs have numerous benefits—such as promoting the early development of children’s social, emotional, and academic skills, and supporting work among parents or other caregivers. Yet child care can also be a significant expense. Many Californians would like to see more children enrolled in preschool, but without policy changes to help families with the costs, the additional financial burden would substantially increase child poverty in the state.

Subsidized child care is a key part of the social safety net that in effect boosts the resources available to low-income families by reducing a significant expense they might otherwise bear. At present, most subsidized child care and preschool programs in California require that families have incomes below specified levels—and often families must meet work requirements as well. But current program funding is not adequate to serve all eligible children.

This report examines the effects on child poverty of expanding access to state-funded preschool for qualifying three- and four-year-olds. We consider several different kinds of expansions, including those that target low-income families and/or working families. We find:

·        Among the state’s 1.03 million three- and four-year-olds, about 263,000 (26%) are currently served by public preschool programs.

·        Expanding access to preschool for low-income families in which all adults are working or in school—and only providing preschool for the hours needed for parents to work—could lower child poverty by up to 12 percent and could serve 263,000 more three- and four-year-olds. Using prevailing market rates, we estimate the potential state cost of this expansion to be $1.03 billion annually.

·        Expanding access to full-time care to all low-income children, regardless of parental employment, could lower child poverty by up to 24 percent and could serve 515,000 more three- and four-year-olds. At market rates, we estimate the potential price tag for this expansion to be $4.20 billion annually.

·        Latino and single-parent families would see the greatest poverty reductions from preschool expansions. For example, in the expansion to low-income working families, 44 percent of three- and four-year-olds moved out of poverty would be from single-parent families, although only 11 percent of young children live in single-parent families.

·        State-funded preschool expansions that are open to families of all income levels would have the same impacts on poverty as the programs above. But research suggests universal programs can have additional educational benefits, especially for lower-income children. We estimate the potential costs of this kind of preschool program to be $1.32 billion annually if targeted to working families and $5.07 billion annually if provided to families regardless of parental employment.

Our findings suggest that when it comes to reducing child poverty, a program without parental work requirements has the potential for the largest impact. However, policymakers may have other objectives in mind when considering expansions to public child care and preschool. For example, if reducing disparities in early learning is a primary goal, a universal program without income requirements might be more promising. As policymakers consider expanding access to early care and education, clarifying their goals is a necessary first step in weighing the trade-offs between different kinds of expansions and determining the best path forward to improve families’ economic well-being and promote the future success of California’s children.