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The role of affordable child care in promoting work outside the home

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The Council of Economic Advisers
Publication Date: 
1 Dec 2019

Excerpted from the executive summary

Compared with 50 years ago, women with young children are about twice as likely to participate in the labor force, and women in general are much more likely to pursue high-skill careers. In the last year under the Trump Administration, women have filled 67 percent of new jobs. An efficient market for nonparental child care is essential for the transformation in labor force participation because it allows for an alternative to parental care and thus expands parents’ available work choices. In this way, markets for nonparental child care, as with markets in general, allow for efficient specialization.

However, the current high price of child care is often cited as a major barrier keeping parents of young children from being able to work. Consequences of high child care prices include not only reduced parental employment but also lower family incomes, increased dependence on welfare programs, and, possibly, decisions to have fewer children.