Mothers and More: The Aggregate Labor Market Effects of Universal Pre-K

Analyses of Universal Pre-Kindergarten (UPK) typically focus on mothers of young children, but because households and labor markets are interconnected, UPK may affect labor supply far more broadly. Using the staggered introduction of UPK in nine states and cities between 1995 and 2014, we find that UPK raises publicly funded Pre-K enrollment by 7–11 percentage points, aggregate employment by about 1%, and total hours by about 2%. Mothers of young children respond most strongly but account for only about 15% of the aggregate labor market response. We provide evidence that informal caregiving is one important channel. Among adults without young children, effects are largest for the demographic groups most likely to provide informal child care in time-use data, and these groups account for 54–62% of the aggregate effect. The implied caregiver responses are consistent with time-use evidence on caregiving prevalence and labor-supply responses documented in prior studies. UPK raises aggregate contemporaneous earnings by about 1.5%, implying roughly $13 in additional earnings per dollar spent, of which mothers account for about one fifth. Using maternal earnings alone, 49% of bootstrap replications imply a marginal value of public funds above one, and 10% imply that UPK pays for itself. In contrast, accounting for earnings gains among all adults raises these shares to 90% and 66%, respectively.