About $24 billion dollars of funding from President Biden's American Rescue Plan will dry up this weekend. According to research from the Century Foundation, more than 70,000 childcare programs will likely close, resulting in up to 3.2 million children potentially losing their child care spots. Chloe Gibbs, University of Notre Dame Department of Economics Assistant Professor tells Yahoo Finance that those estimates likely reflect more of a 'worst case scenario,' but that the U.S. 'will experience some contractions in the supply of childcare.' Gibbs explains the rough road ahead for childcare programs. Gibbs says that to fill the gap created by loss in revenue they may have 'to increase the prices that families face, another [option] might be to contract in terms of the number of hires... which would mean a reduction in slots [available for kids] in the child care centers.' Gibbs warns this may have 'overall effects on economic growth' as parents may be 'less able to engage in the labor market.' For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
About $24 billion dollars of funding from President Biden's American Rescue Plan. According to research from the Century Foundation, more than 70,000 childcare programs will likely close, resulting in up to 3.2 million children potentially losing their child care spots. Chloe Gibbs, University of Notre Dame Department of Economics Assistant Professor tells Yahoo Finance that those estimates likely reflect more of a"worst case scenario," but that the U.S.
For more on this is Chloe Gibbs, assistant professor at the Department of Economics at the University of Notre Dame. So, Chloe, this sounds pretty dire. What are your expectations?What we will see will be less of a cliff and probably more of a slow descent down the hill, back to the prior levels of child care funding.
And so what we may see in this period of funds ending is that child care businesses have to make some difficult choices about how they sort of close the gap between their costs that they face to provide high-quality care and the prices that families can afford. And so one way to do that might be to increase those prices that families face.
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