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Child Care over the Business Cycle

Author

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  • Brown, Jessica H.

    (University of South Carolina)

  • Herbst, Chris M.

    (Arizona State University)

Abstract

We estimate the impact of macroeconomic conditions on the child care market. We find that the industry is substantially more exposed to the business cycle than other low-wage industries and responds more strongly to negative shocks than positive ones. Indeed, child care employment requires more time to recover than the rest of the economy. Although the reduction in supply may pose difficulties for parents, we find evidence that center quality is countercyclical. When unemployment rates are higher, child care workers have on average higher levels of education and experience, turnover rates are lower, and consumer reviews on Yelp.com are higher.

Suggested Citation

  • Brown, Jessica H. & Herbst, Chris M., 2021. "Child Care over the Business Cycle," IZA Discussion Papers 14048, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14048
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    References listed on IDEAS

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    Cited by:

    1. Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2021. "Minimum Quality Regulations and the Demand for Child Care Labor," IZA Discussion Papers 14684, Institute of Labor Economics (IZA).
    2. Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2021. "The impact of COVID-19 on the U.S. child care market: Evidence from stay-at-home orders," Economics of Education Review, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    child care; early childhood education; business cycles;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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