Improving Outcomes in Child Care Subsidy Voucher Programs under Regional Asymmetries

Abstract

Related to several efforts by governments to attain United Nations Sustainable Development Goals, subsidy vouchers are used to provide monetary support to income‐eligible (IE) families who cannot afford child care. However, IE families are often unable to accept an offered voucher due to an inadequate supply of voucher‐accepting child care providers that best suit their needs. Child Care Resource and Referral agencies (CCR&Rs), which administer these programs, can influence the family's propensity to accept a voucher by investing funds both in outreach to increase the number of voucher‐accepting providers in each region, and in provider services to improve the service delivery to families. This study analyzes how a CCR&R should allocate its limited funds between these two types of activities to ensure equitable access to child care across the different regions of its service area. We show that it might be optimal for the CCR&R to invest more funds in outreach in the region with a lower proportion of IE families. This is especially true when: the external considerations (e.g., public transportation and infrastructure) in that region have a greater impact on a family's acceptance propensity; the marginal return of investment in outreach in that region is higher and abundant funds are available; the socioeconomic distress experienced by families in that region is significantly higher; or a large amount of funds is earmarked for outreach in that region. We contextualize our study for a CCR&R in Massachusetts and conclude that the proposed investment decisions can improve equity outcomes by 7.0%.

Socially relevant and inclusive operations management

“…They find that providing the right mixture of supply-and demand-side incentives is more effective than offering only supply-or demandside incentives. Arora et al (2021) examine how Child Care Resource and Referral agencies should allocate their funds among different activities to provide an equitable distribution of monetary support for low-income families who cannot afford child care. Niewoehner and Staats (2022) show that providing performance feedbacks to clinics can be effective in improving clinics' vaccination rates for influenza.…”

Humanitarian Operations and the UN Sustainable Development Goals

“…While the setting is based in the United States, the modeling framework can be adapted to investigate equity in subsidy allocation in other countries. Arora et al (2021) directly relates to SDG4, which aims to "ensure inclusive and equitable quality education and promote lifelong learning opportunities for all." Second, this study relates to SDG5 (gender equality).…”

“…The papers in the current special issue shed light on some of these topics; for example, Arora et al (2021) study the implementation of a voucher system, Sodhi and Knuckles (2021) investigate the role of donors in development aid supply chains, Blair et al (2021) refer to methodological ways of dealing with lack of data, Azizi et al (2021) focus on refugees who left their homes after a complex disaster, and Kougkoulos et al ( 2021) on slavery. At the same time, the broader perspective of the current special issue offered the opportunity to specifically link humanitarian operations to the SDGs and encourage the development of a new field of research.…”

“…Their decision-support tool is used by the Greek government, showing this study clearly closes the loop. Arora et al (2021) and Hasnain et al (2021) focus on the United States. Specifically, Arora et al (2021) develop an analytical model to study whether resources should be allocated to provide more vouchers for child care or to increase the pool of voucher-accepting providers.…”

“…Arora et al (2021) and Hasnain et al (2021) focus on the United States. Specifically, Arora et al (2021) develop an analytical model to study whether resources should be allocated to provide more vouchers for child care or to increase the pool of voucher-accepting providers. Hasnain et al (2021) study the operations of food banks, having worked with an organization for many years in an effort to best close the loop.…”