© Copyright 2006 by the Wyoming Department of Employment, Research & Planning
Vol. 43 No. 4
Child care assistance has positive effects on the economy and the labor force, but few employers offer it to their employees as a benefit. Data from the most recent Wyoming benefits survey show the percent of companies offering child care benefits to their employees has dropped since 2004, from 3.6% to 2.7% for full-time employees and from 2.0% to 1.0% for part-time employees.
National labor force demographics have changed substantially over time. In 1947 only 25% of mothers were in the labor force, compared to 75% today, and only 10% of families were headed by a single parent, compared to 25% in 1996 (U.S. Department of Treasury, 1998). Child care costs $3,000 to $6,000 per child per year, depending on location, the number of children enrolled, and their ages. Middle-class families spend an estimated 7% of their income on child care, while low-income families may spend 25% or more (Schulman, K., 2000).
Studies have shown child care assistance increases labor force participation, especially for women. The U.S. Department of Treasury (1998) reports that a 10% decrease in child care costs may result in a 2% to 8% increase in the likelihood of a married woman joining the workforce (1998). Other studies have shown low income women who receive child care assistance are more likely to find jobs, stay employed longer, work more hours, and earn more than those who receive no assistance (Danziger, Ananat, & Browning, 2004).
Employers offering child care benefits report many positive effects, such as lower levels of absenteeism and turnover, higher levels of productivity, and greater employee morale (U.S. Department of Treasury, 1998). One study found that employer-sponsored child care was not only affordable, but also profitable. (Connelly, DeGraff, & Willis, 2004).
In Wyoming, companies in Education & Healthcare were most likely to offer child care benefits in 2005 (9.7%). The industries least likely to offer child care benefits included Information (0.0%), Leisure & Hospitality (0.4%), and Construction (0.9%).
Large employers are more likely than small employers to offer child care benefits. In 2005, 6.0% of Wyoming employers with more than 50 employees offered full-time employees child care benefits, down from 7.8% in 2004. In contrast, only 2.9% of employers with four or fewer employees offered child care benefits to full-time employees compared to 3.2% in 2004.
Although research has shown employer-provided child care assistance can be beneficial to employers and employees, it is rarely seen in benefit packages, especially in Wyoming.
For a copy of the complete publication, see Research & Planning’s website at http://doe.state.wy.us/LMI or call (307) 473-3807.
Connelly, R., DeGraff, D., & Willis, R. (2004). Kids at work: The economics of employer sponsored on-site child care. Kalamazoo, MI: W.E. Upjohn Institute of Employment Research Press.
Danziger, S. K., Ananat, E. O., & Browning, K. G. (2004, March). Child care subsidies and the transition from welfare to work. Family Relations, 52(2), 219-228. Retrieved June 2, 2006, from http://www.fordschool.umich.edu/research/pdf/Final%20October%202003%20Child%20Care%20Subsidies%20and%20the%20Transition..pdf
Schulman, K. (2000). The high cost of child care puts quality care out of reach for many families. Children’s Defense Fund. Accessed June 2, 2006, from http://www.childrensdefense.org/earlychildhood/childcare/highcost.pdf
U.S. Department of Treasury. (1998, April). Investing in child care: Challenges facing working parents and the private sector response. Accessed June 2, 2006, from http://www.treas.gov/press/releases/reports/chdcare.pdf