The short duration of subsidy use and the possible implications for the stability of child care arrangements, child development, and parental employment stability were the primary motivations behind this study to investigate the reasons parents leave the subsidy program after only a few months. This report explores three main hypotheses on why parents leave the subsidy program: (i) Instability in other aspects of their lives, such as employment changes or family mobility, disrupts participation in the subsidy program. (ii) Parents are no longer eligible for subsidy (particularly due to increased income). (iii) Parents perceive the cost in time and effort of maintaining a subsidy is greater than the benefit of the subsidy.

This study fills an important gap about child care subsidy participation by exploring why parents leave the subsidy program in Oregon. Descriptive analyses using administrative data showed unexpectedly high levels of employment stability and low levels of family mobility. Many families appeared to remain eligible after exit based on earnings and participation in other means-tested assistance programs. Estimates from a Cox regression model showed that subsidy policies were associated with exits. Being in the last month of an eligibility period increased the likelihood of exiting the subsidy program by two to three times. This result suggests that lengthening eligibility period could increase the stability of subsidy usage and possibly subsidized child care arrangements.