When Does It Pay Off to Work? Childcare Costs and Employment after Birth, 1984-2014

• In Event: 2173 - Parenting and Inequality

Abstract

While women’s attachment to the labor market has strengthened over the past decades, employment levels among mothers with young kids remains substantially below the average, suggesting that parents continue to face challenges to balance work and family demands. At the same time, childcare costs have quickly risen, growing at a faster rate than wages, while access to childcare subsidies remains limited. These parallel trends raise the question of whether childcare costs contribute to exacerbate employment opportunities after childbirth between women with high- and low- earnings potential. I investigate this question using the Survey of Income and Program Participation (SIPP) panel data from 1984 to 2014 and state-level measures of childcare costs. The results show that post-birth employment gaps between women widen as childcare costs increase. This result suggests that childcare costs might be contributing to further increasing inequalities across families.

Author

• Pilar Gonalons-Pons, University of Pennsylvania