rouse2_ Matt Roth for The Washington Post via Getty Images_childcare Matt Roth for The Washington Post via Getty Images

America Needs Public Investment in Childcare

Between the high costs of childcare, the absence of credit options to help young parents, and the pressure on providers to contain costs by paying low wages, the US public sector has ample reason to intervene in what has become an essential market. Doing so would serve not just children but the entire economy.

WASHINGTON, DC – This year’s winner of the Nobel Prize in Economics, Claudia Goldin, has been recognized for her work documenting women’s changing role in the US economy over the past several decades. Far from just an interesting historical account of social progress, the topic remains deeply relevant to economic outcomes today.

Between 1950 and 2000, the labor-force participation rate for prime-age women (25-54 years old) nearly doubled in the United States, increasing by 26 percentage points, compared with a ten-point decline for prime-age men. While prime-age women’s labor-force participation fell from 2007 to 2015, data through October indicate that it will reach a new record high in 2023. That means many children today are in households with a working mother. As of 2022, more than two-thirds of mothers with children under age six were in the labor force. While some are the sole earners in their households, others are in households that need two earners. In either case, the big question is: Who takes care of the children?

Recognizing women’s role in the labor market means also recognizing early childhood education and care as an essential market-based service. Without it, both the current health of the economy and future prosperity would be jeopardized. But ensuring ample provision of market-based care is complicated, and several challenges point to the need for a greater public-sector role.