Families with young children have been hit especially hard during the COVID-19 pandemic: they have had to face not only all the labor market disruptions but also all the child care and schooling disruptions. In no prior downturn have families had to endure two disruptions of this magnitude hitting at the same time, with the same rapidity. Understanding the scope and size of these twin disruptions is important, not just for helping these families rebound, but also for promoting state and national economic recovery and ongoing growth. This commentary looks at the labor market disruptions faced by families with young children (ages 0–5) as a result of child care disruptions from the pandemic—costing these families $13 billion per year in lost income—as well as the broader economic consequences.
The pandemic was distinctive in how immediate the shock was: over just a few weeks starting in March 2020, the pandemic hit the labor market hard, causing sharp declines in employment, work hours, and incomes for many workers. But there are now lasting adversities of the pandemic: workers have lost opportunities for promotions and raises, stalling advancement in their careers. Similarly, there was a pandemic shock to the child care sector, with the immediate closure of many providers, followed by the sustained adversity of intermittent and scarce child care. Families with young children have had to navigate both shocks and both adversities.
The immediate economic consequences of pandemic-induced disruptions for families of young children were stark. Before the pandemic, 70 percent of mothers with young children were working; within weeks, the rate had fallen to 60 percent, and has only slowly climbed back to 65 percent since then. For those mothers who still had jobs, hours of work fell immediately by 20 percent; again, a slow reversion has only eliminated half of that decline. As a result, approximately one in fifteen mothers of young children are no longer in the workforce, and the remainder are working 10 percent less.
The data suggest these labor market disruptions are caused by child care disruptions. Since April 2020, the U.S. Census Bureau has been surveying households on how they have been affected by the pandemic. Each round of the survey involves a random selection of households nationwide. Using data from approximately 37,000 households with young children who were surveyed between September and December of 2021 sheds a light on the lasting adversities of the pandemic.
Child care disruptions revealed by Census data are extensive. Almost one-quarter of families with young children report that, just within the past four weeks (when surveyed in the fall 2021), they have been unable to access their formal child care because of pandemic-related disruptions. For low-income households the rate is almost one-third. Unsurprisingly, disruptions were reported much more frequently by mothers than fathers (over one-quarter versus one-fifth); families of color also reported more disruptions, with the rate for Black families reaching almost one-third.
Collectively, over 50 percent of families with young children experienced some decline in household income when child care was unavailable.
Families with young children who experienced child care disruptions lost earnings, and they did so in various ways. Not only did many workers exit the labor market, but still more had to rearrange or shorten work schedules, change contracts, or scale back their careers (see Figure 1). As a result of inadequate child care, many left work: 20 percent of affected households reported either leaving or losing their jobs. And for many other families, the pandemic led them to cut their hours of work or take unpaid leave. Collectively, over 50 percent of families with young children experienced some decline in household income when child care was unavailable. These declines were greater for households of color and for women. These are the direct pandemic penalties from lack of access to child care.
Disrupted families did not just lose earnings: they also lost the opportunity to advance at their jobs. The opportunities to gain experience, training, and education, on-the-job skill accumulation, and to conduct efficient job searches were sharply restricted during the pandemic (see Figure 2). Many families had to juggle both child care and work activities: 29 percent took paid leave; 27 percent directly supervised their children while they were at work; and 15 percent curtailed their job search activities. Again, families of color and women were more likely to experience harder penalties, particularly regarding stopping their job search. All these actions undermine labor market opportunities and so contribute to sustained pandemic penalties from lack of access to child care.
Across the 20 million family members with young children, the aggregate consequences of these earnings losses are substantial. Assuming median earnings (adjusted for labor force participation and employment status), the direct labor market disruptions are conservatively estimated at $9.5 billion annually for each year of the pandemic. The additional opportunity and advancement losses are estimated at $3.5 billion annually. For each year of the pandemic, the total loss is therefore $13 billion. But the labor market losses in terms of lost opportunities may continue as a drag on these households’ earnings for many years after the worst impacts of the pandemic have subsided.
For each year of the pandemic, the total loss is therefore $13 billion. But the labor market losses in terms of lost opportunities may continue as a drag on these households’ earnings for many years after the worst impacts of the pandemic have subsided.
Overall, some families—approximately 5 percent—have incurred the full burden of inadequate child care, having lost work entirely. But another group—approximately 20 percent—has experienced various losses in earnings and work opportunities that may have impacted earnings, promotions, raises, health and retirement benefits, and overall career growth, both during the pandemic and in the future. The penalty for the child care challenges faced by these families have not been shared equally: women and households of color have been most affected and have responded in different ways (see Figures 3, 4, 5, and 6). For all these families, the end of the pandemic may not be the end of the penalty in terms of diminished earnings, savings, and career opportunities.
The labor market disruptions detailed here may not even be the full picture, as there may be yet another drag on the opportunities for families with young children that is harder to measure. Working from home—in some form or other—is likely to be here to stay for the types of jobs where such a work arrangement is possible (often higher-income jobs). Many firms, having invested in communications technology and having hired new workers during the pandemic regardless of their location, are not rushing workers back into the office. For these workers to remain productive, therefore, they will need an “office-like home”—something that is much harder to achieve with young children, as home space and office space cannot be easily separated. Thus, many families with young children will continue to need expanded child care options in the very near future, even if the pandemic subsides. Otherwise, the dual shocks and disruptions to both work and child care—one of the defining features of this pandemic—may be permanently entwined for many families.