Increasing women’s labor force participation by 1% would generate $72.8 billion in additional income for women
—CED report details economic impact of improving access to childcare—
NEW YORK, May 31, 2022 /PRNewswire/ — Raising women’s labor force participation rate by just one percent would dramatically increase economic opportunities for women and bring additional growth and prosperity to United States more generally. For single women, a 1% increase would result in a $72.8 billion income, according to a new report from the Committee for Economic Development, the public policy center of the Conference Board (CED). But as the report highlights, the ability to access paid childcare is one of the biggest barriers to labor market participation and realizing these important economic benefits.
The Economic Role of Paid Child Care in the United States, Part 3: Modeling Economic Growth is the latest in a four-part series of reports examining the issue. The first two reports analyzed large data sets on the use of paid child care by working mothers, as well as the labor force participation of men, women and especially women with 14-year-old children. and less. The new report explores decades of estimates from the Census Bureau’s Current Population Survey and determines the factors affecting labor force participation.
“Labour force participation rates for both women and men have declined over time, a trend that the pandemic has only exacerbated,” said Dr. Lori Esposito Murray, president of DEC. “For women, access to childcare services is a major factor in deciding whether or not to participate in the labor market. As our groundbreaking new study demonstrates, increasing the labor force participation rate of mothers would unlock many economic benefits for women, their families, and the country as a whole.”
Key insights from the new report include:
A 1% increase in the labor market participation of women aged 18 to 54 would yield multiple economic benefits.
- Women who need to enter the labor market: 569,100 more women would enter the labor market, including 210,700 mothers of children aged 14 and under and 44,900 mothers of children under five.
- The impact on paid childcare services: More than 126,000 children would enter paid child care, including 121,800 children 14 and under and 47,900 children under five.
- The impact on personal income: Total real personal income would increase $72.8 billionincluding $26.9 billion for mothers with children 14 and under, and $5.7 billion for those with children under five.
Short-term changes in the prevalence of paid child care correspond to three key factors.
- Participation in the labor market: The increase in the number of working mothers is associated with the increase in the number of children in paid care (especially for mothers with children under five).
- Effective hiring of mothers: Mothers are more likely to use paid child care when employed than when looking for work.
- Revenue increase: The use of paid care increases as income increases.
Long-term changes in the prevalence of paid child care correspond to three key factors.
- Mother’s participation in the labor market: The proportion of children in paid care (for both age groups – mothers with children 14 and under as well as mothers with children under 5) has a significant long-term relationship with economic variables over the course of the period tested.
- Actual income: Real per capita personal income has a stable relationship with the use of paid care.
- Overall participation of men and women in the labor market: Overall labor force participation rates for men and women are also related to the proportion of children in paid care. This is further evidence of a broader and more general relationship between labor force participation and the use of long-term paid child care.
Top Factors Driving the Use of Paid Child Care in the United States
- Participation in the labor market: The use of paid care is closely linked to mothers’ participation in the labor market.
- Household income: As household income increases, the likelihood of using paid child care also increases.
- Educational level: The likelihood of using paid childcare also increases as the level of education increases.
Three factors influence the shape of the state’s economic growth.
- Educational level : Obtaining higher levels of education leads to higher average incomes at the state level (which, in turn, increases the likelihood of using paid child care).
- Capital: Capital investment influences regional economic growth.
- Activity exchanged: Goods and services that are exported for sale outside a local market increase income in a region.
- Growth factors are closely related. For example, higher levels of education are generally associated with higher participation rates and higher earnings. Capital investment acts as a supplement to boost labor market participation and productivity. Many basic industries that produce goods for extra-regional trade tend to be the biggest users of capital.
The report, The Economic Role of Paid Child Care in the United States, Part 3: Modeling economic growthaccessible here. This is the third in a four-part series, produced with funding from the WK Kellogg Foundation, on the use of paid child care. The series and more information can be found here.
The Economic Development Committee (EDC) is the public policy center of The Conference Board. The non-profit, non-partisan, corporate-led organization provides well-researched analysis and reasoned solutions in the interest of the nation. CED Trustees are CEOs and key executives from leading U.S. companies who bring their unique experience to address today’s pressing policy issues. Together they represent over 30 industries, over $1 trillion in revenue and over 4 million employees. www.ced.org
About The Conference Board
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SOURCE Conference Board Economic Development Committee (CED)