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Child care is a significant part of household budgets for families with children and therefore plays an important role in their economic well-being. In keeping with the latest developments in scholarship and with expert recommendations from a recent National Academies of Sciences, Engineering, and Medicine panel, this paper explores implementation of a recommended change to capping child care expenses in the Supplemental Poverty Measure (SPM) for key groups of parents. Supported by the latest research and using data from the Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC), we test the effect on poverty rates of adjusting the cap on child care expenses for SPM units that have a parent out of work and either enrolled in an education or training program, looking for work, or that is disabled. We find that the updated capping procedure has little practical effect on overall poverty rates or poverty rates for the affected groups we examine. The results of these changes inform the future potential changes to the SPM regarding the treatment of child care.
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