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CCDF Policy Brief – November 2013

The ‘exit‐level’ threshold in the Childcare Development Fund design is responsible for the economic phenomenon known as the childcare ‘cliff effect’ - which occurs when a $0.50 increase in hourly wages leads to the complete termination of the benefit and a dramatic net loss of resources. This creates a disincentive towards economic mobility; a parent or guardian turns down the raise due to the prohibitive cost of childcare, or does accept the hard‐earned increase but is now financially worse off.3 By reforming income thresholds in the childcare development fund, policymakers can restore the most basic incentive for hard work - a raise that results in an increase in net resources - and provide Hoosier families with a smooth landing into economic self‐sufficiency.

- Please Read the Entire Brief