Child Care, Female Employment, and Economic Growth

By Kimmel, Jean | Community Development: Journal of the Community Development Society, Summer 2006 | Go to article overview

Child Care, Female Employment, and Economic Growth


Kimmel, Jean, Community Development: Journal of the Community Development Society


In this paper, I describe the linkage between child care, female employment, and regional economic growth. I begin with a detailed examination of modal choices in child care and relate these choices to female employment outcomes. Next, I discuss the empirical evidence regarding the importance of child care prices in employment choices. In the mid-section of the paper, I describe governmental involvement in the child care market both at the federal and state level. Then, I discuss problems with child care that affect parents' involvement, and the role that work disruption plays in the motherhood wage gap. I conclude the paper with a discussion of the importance of a community's work/family support system, including child care assistance to the region's economic development. Although workforce development policies typically focus on preparing new workers for work, I argue for an increased emphasis on worker retention, particularly mothers who comprise an ever-growing proportion of the high-skilled workforce.

Keywords: child care; female employment; intermittent work; motherhood wage gap

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Considerable research by labor economists documents multiple linkages between child care and employment. These linkages include the role of child care prices on child care modal choices as well as employment choices, and the role that policy plays in these choices. The bulk of this literature focuses on the demand side of the child care market; i.e., parental decision-making and individual outcomes in a static setting. Only recently has the discussion been broadened to describe the supply side of the market, namely the importance of affordable, quality child care on the work life trajectory of female workers, as well as the lives of their children. My paper will review briefly the state of knowledge concerning the heterogeneity of child care choices, including differences by various demographic factors, and it will relate these choices, as well as child care prices, to employment decisions. Then, I will describe child care disruptions and the role that these disruptions can play in dampening mothers' wage growth. Finally, I discuss the role that child care can play in facilitating the work and family balance, thereby improving the retention of female workers and facilitating regional economic growth.

ECONOMIC STUDIES OF CHILD CARE

Speaking broadly, the economics of child care literature can be stratified into two distinct strands. The descriptive literature outlines parents' choices regarding the type of child care (referred to as modal choices (1)) and expenditures, relating both to demographics such as ethnicity, education, and income. The second strand is the econometric studies of the role of child care prices and subsidies on child care modal choice, employment, and welfare receipt. These two strands are clearly linked as it is likely that parents consider their employment options jointly with child care considerations, including modal options as well as affordability. However, the bulk of the modal choice literature focuses on this consideration distinct from employment choices, so I begin with a description of that literature.

By focusing solely on the modal choice first, the reader may glean a better understanding of how child care demand varies by family income, age of the child, and ethnicity. An understanding of the role that these factors play in modal choices lays the groundwork for the employment models that follow. Additionally, policy-makers in regional economic development will need this modal choice snapshot to inform their workforce development policies that improve mothers' workforce retention via the provision of child care support. Once this snapshot is complete, I move on to describe the studies that examine the importance of prices on employment choices, and I conclude this second subsection with mention of studies that combine both literature strands. …

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