The Federal Reserve Bank of Chicago has released a comprehensive analysis highlighting how childcare challenges are increasingly keeping parents out of the workforce, with significant implications for employers. The study examines U.S. Census data across three periods—pre-pandemic, peak pandemic, and post-pandemic (2022–2024)—to understand the evolving impact of childcare issues on labor force participation.
The analysis found that the number of parents citing childcare problems as the main reason for not participating in the labor force, working part-time, or missing workdays has risen by 19% from the pre-pandemic period to the present day and mothers with children under five are more than twice as likely to be affected by childcare issues compared to fathers or mothers with older children. Contributing factors include rising cost of childcare, with many families spending amounts comparable to housing costs on childcare.
Additionally, the childcare industry faces its own labor shortages, with employment remaining 9% below pre-pandemic levels as of late 2023. This gap limits the availability of childcare services for working parents. There are significant implications for the labor market as employers report difficulty hiring due to potential employees being unable to secure reliable childcare and employees missing workdays or working part-time because of childcare issues can lead to decreased productivity and increased operational challenges. The analysis highlights the critical intersection between childcare accessibility and stabilizing labor markets. LeadingAge supports policies aimed at expanding access to childcare services, particularly for the aging services workforce, to address these challenges and support economic and workforce recovery.
