Supporting Childcare Supply in the United States: An Economic Policy Review and Research Agenda

Abstract

Childcare market failures have presented economic challenges in communities across the United States. What has prevented childcare supply from meeting demand? We examine childcare market failures in the US and discuss how they are distinct from other types of service markets. We then survey the literature on economic policies that intend to improve the childcare supply. Ultimately, our review suggests that improved worker wages, reduced bureaucratic burdens, and carefully planned public Pre-Kindergarten (Pre-K) programs are useful in boosting the childcare supply. However, several caveats remain, and ultimately, economic research on childcare supply remains limited in light of new COVID-related policy investments. Feminist economists have long argued for economic examination of care markets: we point to the need for future research from the perspective of paid care workers and overall social reproduction.