Child Care Over the Business Cycle

55 Pages Posted: 25 Jan 2021

See all articles by Jessica H. Brown

Jessica H. Brown

University of South Carolina

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs

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.

JEL Classification: J13, J21, E32, J24

Suggested Citation

Brown, Jessica and Herbst, Chris M., Child Care Over the Business Cycle. Available at SSRN: https://ssrn.com/abstract=3771731 or http://dx.doi.org/10.2139/ssrn.3771731

Jessica Brown (Contact Author)

University of South Carolina ( email )

Darla Moore School of Business
1014 Greene Street
Columbia, SC 29208
United States

HOME PAGE: http://www.jessicahbrown.com

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs ( email )

Box 870603
Tempe, AZ 85287
United States

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