Young Children and Parents’ Labor Supply During COVID-19

We study the relationship between childcare needs during the COVID-19 pandemic and parental labor supply. Using monthly Current Population Survey data and following a pre-analysis plan, we implement three variations of an event study research design comparing workers with varying levels of childcare responsibilities. The first compares parents with young children to adults without young children, while the second and third rely on the presence of someone who could provide childcare in the household: a teenager in one and a grandparent in the other. Across these approaches, we find that childcare needs were not negatively associated with parents’ labor supply during the pandemic. We also do not find any difference in estimates between men and women. At the onset of the pandemic, many employers adopted flexible working arrangements. We provide evidence suggesting that the ability to work remotely may have helped many parents avoid labor supply decreases.