A report released today by the UMass Boston Early Education Cost and Usage Simulator (CUSP) Project offers an innovative approach to mitigate the total loss of child care assistance that approximately 32,000 families would experience under Senate Bill 2707 (formerly Senate Bill 301) due to cliff effects.

Senate Bill 2707 would expand access to affordable, high-quality child care in Massachusetts by providing financial assistance for child care and early education based on a family’s income. A family of four earning 85% of the State Median Income (SMI), or $96,743, would be eligible for child care benefits worth $8,643. But a marginal increase in income—even if it is just one dollar—would result in the total loss of those benefits, as depicted in the graphic below.

Addressing the Cliff-Effect Problem in Massachusetts Legislation to Expand Affordable Quality Child Care and Early Education proposes phasing out benefits by reducing them by 50 cents per dollar for every dollar earned that is greater than 85% of SMI. The suggested phase-out would:

• increase the number of families receiving financial assistance for child care by 14.2% (18,300) over the current proposal;
• increase the number of newly working parents by 7.6% (830);
• increase the number of hours worked by parents who are already employed as well as those who would be newly employed by 17.9%; and
• increase the cost to the state by 13.6% ($230 million).

“This report shows how policy innovations can alleviate one of the most persistent challenges families face when accessing child care,” said Anne Douglass, PhD, professor of early childhood education policy and founding executive director of Early Education Leaders. “A phased approach to reducing the benefits provided by Senate Bill 2707 would allow families to grow economically without sacrificing their access to vital child care resources.”

“Cliff effects can create disincentives to work for people whose income is near eligibility limits, and they are also perceived as unfair by the families affected,” said Randy Albelda, PhD, professor emerita of economics at UMass Boston.

“The proposed legislation to expand early education and child care goes a long way in providing licensed care for a large number of children and the proposed phase-out of benefits to mitigate the cliff effect would be a major step forward in leveling the playing field for all families.”

“Without universal eligibility it is nearly impossible to get rid of cliff effects for all families. But an abrupt loss of benefits worth thousands of dollars due to a marginal increase in income is a well-documented barrier to economic mobility for families with low incomes. Fortunately, there are ways to mitigate cliff effects and this policy brief offers one potential solution,” said Alan Clayton-Matthews, PhdD, associate professor emeritus in the School of Public Policy and Urban Affairs and the Department of Economics at Northeastern University.

“This policy brief offers valuable insights to policymakers as they work to craft a comprehensive and equitable child care system in Massachusetts. We urge them to seriously consider the implications of cliff effects and our recommendations to address them,” said Laurie Nsiah-Jefferson, PhD, Director of UMass Boston’s Center for Women in Politics and Public Policy.

Addressing the Cliff-Effect Problem in Massachusetts Legislation to Expand Affordable Quality Child Care and Early Education is the latest in a series of publications by the CUSP Project aimed at informing early education and child care policy in Massachusetts.

Building a Foundation for Racial and Ethnic Equity: Estimated Impacts of Massachusetts Legislation to Expand Affordable Quality Child Care and Early Education, released in June 2024, showed that with an adequate supply of quality child care to meet the expected increase in demand, increasing financial assistance for child care could virtually eliminate existing racial/ethnic gaps in access to quality child care.

Estimating the Impacts of Legislation to Expand Affordable Quality Child Care and Early Education in Massachusetts: Initial Findings on Utilization, Employment, and Financial Assistance, released in October 2023, provided foundational insights into the potential effects of expanded child care assistance on family employment and child care utilization.

A video produced by the CUSP Project features families from across the Commonwealth sharing how their lives would change if they had affordable access to quality child care. Watch it here.

Led by Early Education Leaders, an Institute at UMass Boston, and Center for Women in Politics and Public Policy, the UMass Boston CUSP Project has developed a statistical model to produce estimates of key impacts of proposed legislation in Massachusetts to expand access to affordable, quality child care and early education. The model predicts changes in the utilization of licensed care and education, out-of-pocket costs for families, parental employment, and family income when family financial assistance for child care is increased.

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About the Early Education Leaders Institute

The Early Education Leaders Institute at the University of Massachusetts Boston provides the leadership development opportunities and infrastructure that early educators need to support thriving children and families. Founded in 2016, we drive systems change by cultivating effective leaders who reflect and represent their communities—through workforce and leadership development, research, and partnerships that strengthen the larger early education ecosystem. We are nationally recognized as a model of excellence, and we make high-quality early care and education a reality for more children and families while supporting the professional growth of a diverse workforce of early educators. Get involved or learn more by visiting umb.edu/earlyedinstitute.

About the Center for Women in Politics and Public Policy

The Center for Women in Politics and Public Policy, established in 1994, aims to promote diverse women’s leadership to achieve more just, equitable, and responsive public and institutional policies and meaningful inclusion. Through its innovative educational programs, policy-relevant research, and public forums, it works to ensure that the voices, expertise, and experiences of all women are valued and included in civic discourse and the policymaking process. The center collaborates across sectors to build a prosperous economy that increases access and opportunity for all, particularly low-wage workers and women of color. All center initiatives and research utilize an anti-racist approach and explore the intersection of gender, race/ethnicity, class, and other identities on policymaking and politics. The center is part of the McCormack Graduate School of Policy and Global Studies in the College of Liberal Arts at the University of Massachusetts Boston. Visit umb.edu/cwppp for more information.