By Eryn Mikulicz
When it comes to family-friendly policies, the United States has long lagged behind. By the early twentieth century, when most industrialized nations had established mandatory maternity leave, the U.S. had no federal guidelines. Advocating for such policies in 1919, the Children’s Bureau published a comparative study “in the hope that the information might prove useful to the people of one of the few great countries which as yet have no system of State or national assistance in maternity—the United States.” The recent removal of universal pre-K provisions from Build Back Better and the Inflation Reduction Act should thus come as no surprise—it is simply another manifestation of America’s disregard for families, more specifically women's position as both mother and wage-earner.
And yet the absence of universal child care forms the crux of several daunting, overlapping issues.
Child-rearing, which falls disproportionately on the shoulders of women, is at least partly responsible for the gender gap in employment. The opportunity cost of having children—the income lost—naturally discourages having children. Given that Social Security is projected to become exhausted by 2037, decreasing fertility rates (which have fallen below replacement rate for over a decade) provide more reason to worry about America’s strained social safety net. Also relevant is the current labor shortage and its contribution to inflation. Universal child care offers an ideal solution: The policy would allow women to remain in the workforce and still have children, thereby shrinking the gender gap in employment and earnings, steadying the labor market, and maintaining a steady population. Universal pre-K may also shrink the achievement gap between high- and low-income students.
An analysis of Danish and German child care policy further illustrates these social and economic benefits. In Denmark, all children beginning at 26 weeks-old are guaranteed enrollment in a public day care facility or an expenditure to attend a private facility. It is perhaps not a coincidence that Denmark has also surpassed the U.S. in percentage of women making up the labor force. In Germany, which has provided subsidized child care at varying costs since reunification, the labor force has increased from 40.9% women in 1990 to 47.1% in 2021. Compared to these growth rates, the composition of the United States labor force has stagnated over the past three decades. As the world’s leading economy, this lack of progress towards gender equity is unacceptable.
While increases in German and Danish fertility rates have been meager following the enactment of their child care policies, consequences of such a program would differ vastly in the United States. Introduction of universal pre-k would likely engender a dramatic rise in U.S. fertility rates, more conspicuous than that in Denmark and Germany, because the cost of having a child is initially higher. In other words, while other high-income nations already had established government aid for parents, and thus universal child care was just one of many incentives, this is not the case for American parents. Such a policy would come as a very pleasant surprise. Moreover, spendings on early childhood education and care as a percentage of GDP have been found to have a positive correlation with total fertility rate in the aggregate, across all OECD countries. Government-sponsored child care, then, is a promising solution to America’s Social Security problem.
It is important to acknowledge that the Biden Administration, while failing to uphold its promise of universal pre-K, did successfully incorporate a child tax credit into its domestic plan. The tax credit was certainly helpful to families, but it is unlikely to increase female employment or long-term fertility rates. In Spain, for instance, a child allowance was introduced, and following a brief 3 percent increase, birth rates subsequently fell 6 percent. It is reasonable to assume that child tax credits encourage women to have children earlier, but not necessarily more of them. Moreover, the child tax credit fails to address the more practical issue of who will look after the child; the mother is still unable to rejoin the workforce. An increase in the amount of paid maternity leave will also not suffice, for this policy decreases demand for women employees, who are now seen as more expensive and less efficient, and actually widens the gender gap in employment, as has been found amongst OECD countries.
This yet again points to universal child care as the ideal option for improving women’s outcomes and returning fertility to replacement rate. It must be communicated, however, that such a policy comes with its drawbacks. In order to be equitable, universal child care must be truly universal. Those who attend preschool are more likely to graduate from both high school and college, and so government-sponsored early childhood care and education programs have great equalizing potential for disadvantaged communities. But Biden’s failed plan gave states the option to opt-out of federal funding, meaning governors could simply refuse to establish these facilities, and the communities that would benefit most from the program would be excluded. Similarly, the cost of German kitas—or preschools—varies by Bundesland, or federal state. Hamburg and Berlin, the only two Bundesländer with cost-free kitas, are also two of the three most expensive German cities to live in. In this case, existing wealth becomes an obstacle to accumulating generational wealth as cycles of polarized academic achievement and income inequality perpetuate. In simpler terms, a parent (typically the mother) cannot work when their child cannot enroll in a kita, yet they cannot afford to move somewhere that their child could enroll in a kita. It is a paradox entrapping the impoverished—something the United States must avoid by federalizing any attempt at universal pre-K.
With a newly Republican-controlled House of Representatives, the future of universal child care in America looks dismal. Still, it is a more-than-worthwhile pursuit. Such a policy would end America’s current period of stagnation in shrinking the gender employment and earnings gap while ensuring that the upcoming generation will uphold the Social Security trust fund. The recent hike in interest rates adds further imperative to expanding American child care policy, as more women in the workforce would decrease demand for labor, stabilize wage growth, and in turn curb inflation. As long as the program is established thoughtfully, with equity always in mind, the costs of universal child care—which are admittedly large—are outweighed by the generational benefits of gender parity in the workforce, a secure social safety net, a strong labor force, reduced inflation, and a more just education system.
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