Universal Child Care Could Boost Women's Income by Billions, According to New Research

Millions of women have dropped out of the workforce during the pandemic. Now, research is highlighting how a universal child care system could offer a bevy solutions and benefits.

In February 2020, the world hurdled toward a whole new reality in many ways. For at least 2.3 million of women, that reality involved dropping out of the workforce. It's a phenomenon that President Joe Biden has called a "national emergency."

There is a very clear solution with many benefits, according to new research from the National Women's Law Center and the Center on Poverty and Social Policy at Columbia University: universal child care.

mother holding daughter in lap while using laptop computer on desk
Illustration by Francesca Spatola; Getty (1)

For a report released last month, researchers used a model of universal child care that would offer stable, consistent care to kids from birth to age 13. Costs would not exceed 7 percent of a family's annual income. Child care workers would also earn a livable wage as opposed to the median wage of $11.65 an hour before the pandemic.

They state the model would result in:

  • Increasing the number of women with young children working full-time/full-year, particularly for those with less than a college degree.
  • Narrowing the earnings gap between men and women, by allowing more women to enter the workforce and have more work hours.
  • Increasing women's lifetime earnings—with the biggest percent increases among Black and Latinx women—and strengthen their financial security into retirement.
  • Reversing the history of undervaluing women's caregiving responsibilities by significantly improving the economic and retirement security of child care workers.

When it comes to the income benefit, researchers found that an average woman with two children could see a $94K increase in her lifetime earnings thanks to universal child care. Black and Latinx women would benefit from increased earnings and retirement savings. They'd get additional lifetime Social Security benefits of $13,000 and $12,000 respectively. That compares to $8,000 for white women.

Researchers point out 1.3 million women in the U.S. could experience about a $130 billion boost in income over their lifetimes.

And if universal child care was implemented, full-time job numbers would improve by 17 percent, while the number of women working without a college degree would go up by about 31 percent.

Melissa Boteach, vice president of income security and child care/early learning at the National Women's Law Center, emphasized just how crucial a model like this could be when it comes to addressing the national emergency of women leaving the workforce, telling CNBC, "When there's an increased investment in child care, there's a measured increase in women's labor force participation."

She added that the highest gains would be seen for women in their 30s and 40s (since they're the ones most likely to be raising children), as well as low-income women who are typically spending about a third of their take-home pay on child care.

All of that said, it's no wonder the conversation is quickly turning from just talking to actually taking action on universal child care. As the report points out, "Investing in high-quality, affordable child care not only supports families, the development and lifetime outcomes of children, and the communities of families and providers in real-time, but has additional effects that increase economic security for women and families throughout their lives."

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