Public Funding and Enrollment in Formal Child Care in the 1990s

Although the share of all 3‐ and 4‐year‐old children enrolled in center‐based care and early education has grown steadily in recent decades, rates of enrollment for children from low‐income families still lag behind those for children from families with high incomes. During the 1990s, growing public funding for compensatory preschool education and means‐tested child‐care assistance had the potential to increase the availability of free or low‐cost formal child‐care arrangements and thus the attendance of low‐income children. This article analyzes repeated cross‐sectional data on formal child‐care attendance from the October Current Population Survey as well as data on state‐level funding. The results indicate that increases in public funding are positively associated with the probability that low‐income young children attended formal care. These results also suggest that gaps in formal care between low‐ and high‐income families would have widened in the absence of public investments.