Economic Snapshot | Children

An ambitious investment in child care can boost women’s labor force participation and narrow the gender wage gap

Ambitious investments in high quality child care can narrow the gender wage gap and help boost the economy by increasing women’s labor force participation. Examining the U.S. women’s labor force participation rate over time reveals that, while U.S. women have increased their labor force participation rate greatly in the last 50 years, there is still room for improvement, especially when compared with international peers. In 1995, 72.2 percent of prime-age women in the United States had a job. By 2014, this number had dropped to 70 percent after peaking at 74.2 percent in 2000. The share of women ages 25–54 with jobs in the United States in 2014 is also relatively low compared to peer countries like Japan, Canada, and Germany, where women’s labor force participation rose significantly over the last two decades.

Making quality child care affordable and accessible would make it easier for women to enter or stay in the labor force. This would translate into a narrowing of the gender wage gap because it would help women avoid the penalties they incur when they take time out of the labor force to care for children, penalties which most starkly manifest as lost wages and lower future earnings. Increasing women’s labor force participation could also boost U.S. gross domestic product by as much as $210 billion, meaning that the United States has much to gain from investing in policies that give women the option to stay in or enter the labor force.

Economic Snapshot

An ambitious investment in child care can boost women’s labor force participation and narrow the gender wage gap: Employment-to-population ratio of women workers age 25–54, select countries, 1995–2014

Canada Germany Japan United States
1995 69.434551% 66.360158% 63.233624% 72.189196%
1996 69.577146% 67.220440% 63.701741% 72.770073%
1997 70.971110% 67.399584% 64.566038% 73.541046%
1998 72.183646% 68.944387% 64.036077% 73.642970%
1999 73.245982% 70.253128% 63.551051% 74.147991%
2000 73.944309% 71.210539% 63.582090% 74.213847%
2001 74.297867% 71.607431% 64.124398% 73.421299%
2002 75.348504% 71.845950% 63.863976% 72.259684%
2003 76.000458% 71.981067% 64.407421% 72.006189%
2004 76.720415% 72.129055% 65.028791% 71.848458%
2005 76.488663% 70.969949% 65.733178% 71.963537%
2006 76.984912% 72.647765% 66.614235% 72.504467%
2007 78.190906% 74.045933% 67.370518% 72.501768%
2008 78.008148% 74.744854% 67.495987% 72.301570%
2009 77.114622% 75.420875% 67.595960% 70.208609%
2010 77.075022% 76.320711% 68.157788% 69.343654%
2011 77.207691% 77.892216% 68.459240% 68.967922%
2012 77.710148% 78.235789% 69.161920% 69.196894%
2013 78.090883% 78.625264% 70.773639% 69.253713%
2014 77.444969% 78.839200% 71.835052% 69.997790%

 

ChartData Download data

The data below can be saved or copied directly into Excel.

Source: EPI analysis of OECD Labour Force Statistics

Copy the code below to embed this chart on your website.


See related work on Children | Women

See more work by Elise Gould and Jessica Schieder