Child Care Can Strengthen the Workforce

Excerpt from On the Economy Blog of the Federal Reserve Bank of St. Louis

Child Care Can Strengthen the Workforce

April 13, 2023
By Ana Hernández Kent ,  Xiaohan Zhang

Child care provides an essential service for parent workers and their families. Two-thirds of mothers and 94% of fathers with children under age 6 work or are actively looking for work, according to the St. Louis Fed webpage “The Economic Impact of Child Care by State.” Child care (whether formal or informal) is necessary for them to participate in the labor force. Further, since most people become parents, the advantages and challenges related to child care are widespread. When the child care system doesn’t fully meet parents’ needs, one parent (typically the mother) leaves or does not enter the labor market.

Several parents who worked nontraditional hours shared their difficulties in finding child care. When a job sometimes requires 8 p.m. meetings, obtaining child care is not possible, said one parent with a child under 5. “The (child care) hours… just don’t fit for the type of work that I do,” the parent noted.

There are numerous benefits to supporting parents who want or need employment. Employed parents improve their family’s financial security, contribute to companies’ productivity by addressing labor shortages and provide a broader tax base for states. In other words, when parents—particularly mothers—can work, the economy is stronger and more productive.

There are also negative consequences when child care availability is restricted. For example, during the COVID-19 pandemic, shutdowns, closures, reduced hours and staff shortages were prevalent, which severely impacted parents and providers. Women, particularly mothers, disproportionately left the labor force, and the nation lost more than 98,000 child care workers—a substantial drop of 11% between February 2020 and December 2021. Challenges with supply, access and affordability predate the pandemic but were exacerbated by it. Moreover, these challenges are inequitably distributed.

Source: Child Care: Critical to the Economy but Difficult to Access and Afford. (n.d.). www.stlouisfed.org. https://www.stlouisfed.org/on-the-economy/2023/apr/child-care-critical-economy-difficult-access-afford

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