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Title: The U.S. Child Care Crisis: Facts, Causes, and Policies

Citation Type: Working Paper

Publication Year: 2020

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Abstract: Why does the United States lack affordable child care? I examine the long-term trend of the child care market and document a sharp price increase since the late 1990s. I show that a massive expansion of federal and state means-tested child care subsidies, which were intended to stimulate the market, instead crowded out child care supply. The evidence suggests that the subsidies discouraged home-based child care suppliers who were also working mothers. A simple calibrated equilibrium model captures the rising price, which eventually caused the female employment rate to decline. An effective policy should capitalize on the home-based care business.

Url: https://www.waseda.jp/fpse/winpec/assets/uploads/2020/07/E2008_version.pdf

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Authors: Kubota, So

Series Title: WINPEC Working Paper Series

Publication Number: E2008

Institution: Waseda Institute of Political Economy

Pages: 44

Publisher Location: Tokyo, Japan

Data Collections: IPUMS USA

Topics: Family and Marriage, Labor Force and Occupational Structure

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