The U.S. is an outlier among wealthy nations in not guaranteeing child-care assistance for working parents. A new study suggests fixing that would bring numerous economic benefits.
Subsidizing child care, a key part of President Biden’s pandemic recovery legislation that has so far failed to pass into law, would increase the number of mothers in the workforce and boost wages for industry workers, among other social and economic benefits, according to a newFor households making up to 250% of the national median income — which is $90,657 for a family of four — a federal program that would cover child-care costs exceeding 7% of that family’s income would boost mothers’...
“These shifts also facilitate meaningful increases in maternal employment and imply improvements in the quality of care experienced by children.” The paper’s authors created three models, each reflecting different degrees of subsidies, based on existing legislation. The broadest, which includes capping the amount of money a family spends on child care at 7% of income, is based on Biden’s proposal in the Build Back Better Act. In that scenario, the gains in the job market would be driven by low-income mothers, whose full-time employment would probably increase by 18.2 percentage points.
By increasing demand for the services, child-care subsidies would boost hourly wages for industry workers, who make an average $12.12 per hour and are disproportionately women of color. Wages could increase as much as 29% for teachers with a bachelor’s degree, and 14% for those without one, the authors found.
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