Throughout 2023, both policymakers and advocates warned that the labor force participation rate (LFPR) for women was about to drop. The main reason? Much of the American Rescue Plan’s (ARP) child care funding was slated to expire in September 2023. This “child care funding cliff” was expected to put 3.2 million children at risk of losing child care, which would subsequently cause many women to drop out of the workforce to take care of their kids.
Instead, the LFPR for prime-age women (ages 25 to 54) continued to rise after the funds expired and reached a record high of 78.4% in August 2024. While at first glance this challenges the hypothesis around the funding cliff and women’s LFPR, a closer look at the data by the JEC Dems finds a more nuanced conclusion. Among all prime-age women, those whose youngest kid is under age five saw both the largest increase in LFPR while the child care funds were available, and the largest decrease once the funds expired. The overall increase in participation for prime-age women over the last year is hiding that many mothers of young kids have dropped out of the labor force, likely in part due to child care concerns. Though a strong economy, changing demographics, and workplace polices like telework can support participation for prime-age women, these trends demonstrate the need for continued investments in the care economy that support mothers’ ability to work.
Before the expiration of ARP child care funding, LFPRs largely increased across the board with prime-age women with young kids seeing the largest uptick
To get a better sense of how ARP child care funding affected LFPR, JEC staff compared how civilian participation rates changed between September 2019 and September 2023 for prime-age women by marital status, parental status, youngest child’s age, educational attainment, race and ethnicity, and birthplace.
The analysis finds statistically significant jumps in the LFPR for all but one group of prime-age women, with particularly large jumps for women whose youngest child is under age five (+3.7 percentage points), Asian American, Native Hawaiian, and Pacific Islander women (+3.2 percentage points); foreign-born women (+3.0 percentage points); Latinas (2.8 percentage points); and married women (+2.3 percentage points). Unmarried women were the only group to see a decline in LFPR. Full results are included as an appendix.
Child care funding from the ARP is proven to have helped boost the LFPR for mothers of young children—the most likely group to need child care. It is likely this funding contributed to this increase for prime-age women specifically. Women whose youngest child is between ages 5 and 12 (+1.0 percentage point) and women whose youngest child is between ages 13 and 18 (+0.2 percentage points) all saw increases of a smaller magnitude in LFPR than women with younger children (+3.7 percentage points). Prime-age women whose youngest child is under five saw the largest jump in LFPR in the four years preceding the expiration of funding and saw the three-month moving average of their participation rate peak in October 2023.
