Reduction in Labor Force: Mothers of Young Children Harmed by Pandemic

New Federal Reserve of Minneapolis Article

February 16th, 2021

Joe Rutkiewicz

Federal Reserve Article

Humphrey Alumnus Tyler Boesch recently published an article with other economists at the Federal Reserve of Minneapolis (Ninth District) looking at the impact of the COVID-19 pandemic on mothers of young children in the work force. The devastation of the pandemic has wholly altered how the world operates, and childcare is no exception. The Federal Reserve found a 3.4 percentage point decline for mothers in the labor force comparing employment rates from November 2019 to November 2020. Notable findings include a higher return to the work force for fathers with same-aged children. For non-college-educated mothers, these effects are even more detrimental. Mothers are in the difficult position of either bringing in money to the home or taking care of their children.

Attention to the pandemic’s economic effects for new families facing financial constraints requires improved childcare opportunities without contributing to the financial constraint. Policy must begin to repair the damage done to young families as soon as possible to prevent further harm. The pandemic costs have immediate effects, but the long-run effects have even greater economic consequences in human capital. The Federal Reserve advocates for increasing access to affordable childcare through public funding, “the literature is clear: Dollars invested in (early childhood development) yield extraordinary public returns” (Rolnick & Grunewald 2003). The pandemic was an unforeseen event, and childcare availability, safety, and affordability “will affect how quickly labor markets and the economy recover” (Boesch, Grunewald, Nunn, & Palmer 2021). Over a year has passed in the era of COVID-19 and solutions for availability, safety, and affordability will be necessary for a full recovery.

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