July 14, 2021
Working-class mothers, meaning mothers who have not attained at least a bachelor’s degree, have borne the brunt of the recent recession. Not only did their unemployment rate increase faster than their counterparts with bachelor’s degrees, but they also left the workforce at a much higher rate. With childcare shortages a continuing effect of the pandemic, it has become even harder for working-class mothers to find affordable childcare, leading to a less rapid job recovery among mothers, and more than 30 percent of mothers of color reducing their employment because of difficulty finding childcare.
Even before the pandemic, accessing affordable childcare was challenging for families. For instance, low-income families paid around one-third of their income on childcare, and almost 50 percent of mothers had difficulty finding childcare, resulting in an estimated $57 billion in lost earnings and revenue in 2018. The added stress of the pandemic on parents, especially mothers, in the labor force has further revealed the inadequacy of the United States’ childcare infrastructure, prompting a renewed public focus on childcare policy.
One contention of the debate on legislating comprehensive childcare has centered on the proportion of the labor force mothers make up. Some commentators conclude the proportion is relatively low; therefore, childcare for mothers in the labor force is not a wise economic policy. These arguments are misguided in their conclusions and ignore the instrumental role childcare investment plays in promoting positive child development and equitable access to participation in the labor force.
Mothers make up a significant portion of the labor force, with women with children under 18 making up around 16 percent of the workforce. To put this in perspective, the US government spent 700 billion dollars to bail out Wall Street in 2008, a sector that represents at most 2.5 percent of those employed. While there were larger economic concerns besides these 2.5 percent of workers, this shows that economic policy has not, and should not, be justified by the proportion of the labor force the targeted group represents or the immediate effect on employment. Rather, we should look to the welfare benefits, long-term impacts, and alleviation of inequity a policy delivers. Using these as a guide, an investment in childcare is a no-brainer.
Investing in childcare has significant positive impacts on children, parents, and employers. Access to childcare improves children’s health outcomes and economic prospects and lowers their risk of drug use, incarceration, and grade repetition. When parents have access to affordable childcare they have more time to dedicate to their careers. Additionally, the burden parents face when worrying about who will take care of their children while they work to make ends meet is reduced, which increases work productivity, benefits employers, and reduces employee turnover.
In addition to the strong moral for improving childcare infrastructure in the US, there is also a strong economic case. Investing in childcare has a high return on investment. Using randomized control trials to estimate the impact of a comprehensive childcare program on children ages 0 to 5, James Heckman found that these programs had an estimated 7-10 percent return on investment. The studied programs importantly contained similar components to recent childcare proposals, such as access to early learning support and nutrition assistance.
Thankfully, increasing access to childcare is a priority for the Biden Administration through the American Jobs Plan (AJP) and the American Families Plan (AFP). The AJP and the AFP collectively provide universal pre-K for 3 to 4-year-olds, benefitting 5 million children, guarantee that no low- or middle-income family spend more than 7 percent of their income on childcare, and increase wages and training for childcare workers. Additionally, current estimates have shown that the American Families Plan and American Jobs Plan would create approximately 1.6 million jobs and allow 3 million more women to participate in the labor force.
While an investment in childcare will not immediately create tens of millions of jobs, its long run impacts on mothers’ labor force participation are expected to be considerable. Recently implemented childcare programs in the US have demonstrated the positive labor effects of universal childcare, with a universal preschool program for 3 and 4-year-olds in Washington, DC raising the maternal labor force participation rate by 10 percentage points. Other universal childcare programs in England, Canada, and Israel result in similar labor effects.
Regardless of the employment impacts, policies aimed at helping a population recover from a downturn are policy decisions that are made because a sector is important, not necessarily made for job creation reasons. Unlike previous recovery policies, such as the Wall Street Bailout, a childcare policy would help reduce inequality and increase the welfare of children and a portion of the labor force that has too often been overlooked: mothers.