2. Literature Review

There is general agreement in the literature that limited access to affordable dependent care can be a major barrier to sustained employment and improved financial status, especially for low income women and families [53]. Yet, the literature reports different employment elasticities or the degree to which changes in the costs, subsidies, supply of dependent care services and caregiving responsibilities affect labor force participation rates (LFPRs), mainly of women [54]. These heterogenous findings are expected since authors use different variables, databases, methods, timeframes and research questions. As of 2018, nearly 10 million U.S. women report that family and home responsibilities keep them from participating in the labor force [55]. Additionally, approximately 71 percent of nonworkers in official poverty with children under the age of 5 in the household cite taking care of home/family as the reason for not working [56].

Research shows that lowering the costs and improving access to child care can have a positive impact on labor force participation rates. The findings of a comprehensive literature review that examines the relationship between child care costs and parental employment, inside and outside of the U.S., suggest that a 10 percent decrease in the price of child care would lead to a 0.25-11 percent increase in maternal employment, most likely near 0.5-2.5 percent [57]. Similarly, in the case of West Virginia, a 4.7 percentage point increase in the number of children in paid child care would lead to an increase in the LFPR by 1.7 percentage point for married couples and 1 percentage point for female householders. This increase in the LFPR would translate into 4,000 people being released to search for jobs and enter the workforce and approximately $300 million being added to West Virginia’s economy.

A recent study that looks at the relationship between child care costs and the LFPR of women found that rising child care expenditures can partially explain declining rates of participation in the labor force. The study found that between 1990 and 2010, child care costs in the United States rose by 32 percent and hours of child care use declined by 27 percent while the LFPR of women stagnated in 1990 and declined after 2000 [58]. These factors ultimately contributed to a 5 percent decrease in the total employment of women and a 13 percent decrease in the total employment of working mothers with children under the age of 5. Similarly, the results of a state-by-state analysis of the relationship among maternal employment, child care costs and mean school day length suggest that states with higher child care costs and shorter school days have lower maternal employment [59].  

The same is true for lack of access to adult dependent care and the ensuing economic cost to families and the economy, especially because demand for such care is growing [60]. As pointed out by Ai-jen Poo, a co-director of Caring Across Generations, “[t]he boomer generation is turning 70 at a rate of 10,000 per day and living years longer than when the safety net was originally built … [and] women in particular are bearing the brunt” [61]. The burden of care is particularly significant in rural areas and aging societies, both strong characteristics of West Virginia [62]. Some experts argue that elder care – and not child care, contrary to popular belief – is keeping women out of the labor force [63]. According to the Bureau of Labor Statistics, as of 2017-2018, approximately 27 percent of women aged 55-64, 25 percent aged 45-54 and 13 percent aged 35-44 are caring for an older relative [64]. Familial caregivers spend on average 21 hours a week providing care to an older adult. As a result, 70 percent of caregivers report having to miss work to provide care, 46 percent report cutting back their work hours, 30 percent report missing career opportunities and 9 percent report losing their jobs [65].

The results of a study on the estimated work-related opportunity costs of unpaid caregiving – considering working-age adults who provide care to older adults, including parents and other family members – indicate that the total economic cost of lost work or foregone earnings was approximately $67 billion in 2013. By 2050, the economic cost is likely to double to $132–$147 billion, mainly due to the growth of the disabled older population and the increase in the share of better-educated caregivers [66].

On the other hand, the findings of a systematic review [67] of the international research on unpaid caregivers and their labor market choices suggest that: (1) for the most part, caregivers and non-caregivers are equally as likely to be in the labor force, (2) caregivers are more likely to work fewer hours than non-caregivers, especially if they have more demanding caregiving commitments and (3) only caregivers heavily involved in caregiving are significantly more likely to leave the workforce than non-caregivers [68]. That is, greater access to dependent care services or formal care would likely mostly benefit only those who are engaged in intensive caregiving, which in the analysis was measured by the following variables: care recipient’s increasing need, lack of caregiver substitutes, primary caregiver status, number of care recipients and weekly hours of caregiving [69]. At the same time, it is important to consider that although the authors carry out a rigorous systematic review following best practices for conducting such analyses in the social arena, their investigation includes articles published between 1986 and 2006, which, at the time of this writing, are dated.

Nevertheless, a recent analysis concluded that working families in the U.S. forego roughly $29 billion [70] per year in lost wages because they either do not have access to affordable child care or do not have paid family and medical leave benefits [71]. Most importantly, the findings of a 2015 study carried by the U.S. Department of Labor suggest that if American women participated in the labor force at the same rate as women in Canada or Germany – countries that have more supportive policies to working families and subsidies for child care, elder care and family medical leave – 5.5 million more women (ages 25 to 54) would have been in the workforce in 2014, boosting the U.S.’s GDP by 3.5 percent or adding well over $500 billion to the economy [72]. The next section provides an overview of dependent care offerings in West Virginia.