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Child Care Price Dynamics in California

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Although expenditures on child care subsidies in California rose from $125 million in 1992 to $1.5 billion in 2001, some 200,000 children in California are still on the waiting list for child care vouchers, and many families are eligible for assistance but unaware that they qualify for it. In Child Care Price Dynamics in California, Grecia Marrufo, Margaret O’Brien-Strain, and Helen Oliver examine California’s child care market in light of these recent policy changes. They document double-digit increases in real child care prices, significant price variation by region, and stable earnings for child care workers. They also conclude that state subsidies, which accounted for roughly 20 percent of gross receipts in the California child care market in the 1990s, put significant upward pressure on child care prices.