Employment Trends and Child Care Trends: Does Rising Demand Mean Rising Supply?

Carlena Cochi Ficano, Hartwick College

Currently, over 75% of all pre-school aged children of working mothers receive some form of non-parental childcare on a part time or full time basis (Urban Institute Report, 2002). Proceeding under the economic assumption that rising demand will generate its own supply, ongoing policy intervention through direct and indirect demand subsidization attempts to mitigate the chronic undersupply of quality formal care noted by many authors. This paper uses a unique longitudinal dataset compiled in part from special tabulations of the 1990 and 2000 Census of Population and Housing to examine actual supply responsiveness in the child care market by modeling county level changes in the supply of center care between 1990 and 2000 as a function of lagged changes in 1) female labor force participation, 2) welfare to work policy, 3) child care tax incentive policy, 4) child care regulatory policy, 5) state child care subsidy spending, and 6) the availability of informal, family day care options.