The Economic Role of Paid Child Care in the U.S. Part 3: Economic Growth Modeling

May 26, 2022
  • Description

This report is the third in a four-part series focused on the use of paid child care in the U.S. The report provides extensive empirical analysis on a group of factors that potentially underlie differences in paid child care usage across the states and over time. These factors were introduced and discussed in the first report in the series.

Time series tests of both short- and long-run statistical causality are used to examine the empirical relationships between these factors and paid child care usage. The report then develops a model of long-run economic growth and uses it to examine the potential effects of increased maternal and female labor force participation on real income growth and paid child care usage.

The results provide a helpful empirical view of the historical linkages between these factors and paid child care usage as well as the role of paid child care in economic growth. For policymakers, the results also inform the ongoing policy debate over the economic role of paid child care.