High Child Care Costs Keep American Parents Out of the Workforce

A new report from the Council of Economic Advisers, finds that making child care more affordable could help up to 10.4 million parents chose to enter the labor force or increase their work hours. As of December 2016, there were 3.8 million nondisabled, working-age parents with children under age 6 outside the labor force, and another 6.6 million such parents with children under age 13 working part time. The vast majority of these parents are women (86 percent). The paper reviews evidence on the responsiveness of work status and hours to wages and child care costs, and analyzes the degree to which these 10.4 million parents would enter the labor force or increase their work hours in response to a reduction in the market price of child care.

Lower child care prices would provide parents greater ability to choose a balance between working outside the home and caring for their children. This could ultimately bring more Americans into the labor market, increasing economic growth. Creating a system that maximizes parents’ opportunities without interfering with personal family decisions is a vitally important goal for the Trump Administration that will benefit American society as a whole.

Please click here to view the full report.