Care Labor and Family Income Inequality: How Childcare Costs Exacerbate Inequality among U.S. Families

Abstract

Care infrastructures are essential for supporting families and enabling women’s participation in the labor market, but they also have implications for family income inequality. This article examines access to childcare services in the United States as a case study. We propose that market-priced childcare systems generate inequalities in how births affect mothers’ contributions to family income, because they constrain post-birth labor supply for lower-income women more than for higher-income women, and aggravate family income inequality as a result. Using the Survey of Income and Program Participation (SIPP) merged with state-level childcare prices, we estimate individual fixed-effects regression models for the consequences of births on family income and its proximate determinants: mothers’ labor supply and earnings, and partners’ labor supply and earnings. We find that childcare prices increase post-birth earnings losses for mothers without college degrees, but not for mothers with college degrees, and these losses are not compensated for by increases in partners’ earnings or by income transfers. As a result, childcare costs exacerbate family income gaps between partnered women with and without a college degree by 34 percentage points.