Should COVID-19 child care and paid leave policies expand?

When COVID-19 first swept through the country, closing schools, sending millions home to work and learn remotely and curtailing activities, Congress and others stepped in to offer families support. 

Besides direct stimulus payments that reached the majority of U.S. adults, the child tax credit was expanded and even temporarily paid monthly. Paid leave for some businesses was expanded to cover COVID-19 illness, among other steps.

Now, family policy experts are examining the impact of these initiatives and considering what should happen next.

One report, “The Safety Net During the Pandemic: Childcare, Paid Leave and Income-Support Programs,” by Angela Rachidi, an American Enterprise Institute senior fellow and poverty studies scholar, suggests that temporary help got people through the worst of the crisis and it’s possible Congress could overreact and offer safety net expansions whose costs and services are not needed.

“Congress has discussed making permanent changes to the safety net partly in response to what happened during the pandemic,” Rachidi told the Deseret News. She said Democrat-led proposals include nearly universal child care, government-provided paid leave and income support such as the expanded child tax credit.

Since the safety net held up pretty well in the pandemic with a few temporary boosts, Rachidi is skeptical that passing large new programs costing billions of dollars is needed — or a good idea.

Findings across waves

Rachidi’s report draws on a longitudinal study the nonpartisan research organization NORC at the University of Chicago did for the American Enterprise Institute. It surveyed working-age adults early in the pandemic then followed the sample of 3,518 — weighted to be nationally representative — over 18 months. They asked about employment, child care, paid leave, use of safety net programs and attitudes about government.

Over three waves of questions, some people dropped out, with 2,466 answering in September 2021. The report includes only those who completed all three waves.

Rachidi notes that the final wave was slightly different from the first — a little older, and a bit more low-income. “While the trends observed in the data remain informative, they do not necessarily represent the broader working-age adult,” she said, because some people dropped out over time.

Among the report’s findings: 

• The safety net available during the pandemic, including program expansions Congress made, were an “important resource to many households.” 
• The drop in full-time employment for all working-age adults early in the pandemic largely recovered by September 2021, though women saw a more dramatic decrease compared to men.
• Child care didn’t drive the decline; rather, the number of parents who lost jobs or went home over COVID-19 fears reduced demand for child care.
• Access to paid leave during the pandemic increased from 44% to 55%. But while throughout the pandemic the share who took some leave within the past six months rose from 16% to 32%, a similar increase in unmet need for leave in the past six months was also seen, rising from 15% to 32%.
• Many used safety net programs for the first time during COVID-19, especially unemployment insurance.

“Contrary to early beliefs, limited child care supply did not hurt maternal labor force participation. And even without a national paid leave policy after December 2020, the majority of workers had access to paid leave and a sizable share used it,” said Rachidi. “I hope the results will be used to inform policy in a data-driven way.”

Why less child care?

The survey showed the loss of maternal employment was “severe, but short-lived.” Even among mothers, rates of full- and part-time employment had recovered to almost pre-pandemic levels by September 2021.

Rachidi wrote that the decreased demand for child care disrupted the child care market. A survey by the National Association for the Education of Young Children survey reported in June 2020 that 86% of child care providers they surveyed said they were serving fewer children. 

Rachidi told the Deseret News it wasn’t clear why they were serving fewer children. But she said she used the data point to show it is “consistent with the idea that demand declined, which is what our survey showed.” She said the overwhelming top two reasons given were “did not need it” and “fear of COVID.” The report said just 10% of parents surveyed July 2020 said they weren’t using child care because they couldn’t find it.

Over the course of the three surveys, Rachidi said only 37% of parents said they used no child care. She wrote that “issues related to affordability or inability to find a child care provider were uncommon reasons for not using child care among parents in our sample.”

Other experts have said child care declined in part because centers had to reduce their staff early on and thus when things reopened could not serve as many children. Social distancing requirements also reduced the number served,

While most mothers who left the labor force were back by the end of 2021, Jennifer Glass, a professor at the University of Texas at Austin and executive director of the Council on Contemporary Families, said many had no choice.

“As my earlier research has shown, many families with kids — about 35%-40% at any given point — are mostly dependent on mom’s earnings so they could not stay out long. We do not know how much they lost in earnings and future wage growth if they had to quit their jobs and returned to different employers, though,” which could prove to be expensive over time in terms of earnings and advancement, she said.

“Many would have returned much more quickly had there been child care and school available for their kid,” Glass added, noting that the rate of mothers’ employment went up as child care and schools opened up.

By September 2021, more people were using child care than before the pandemic, Rachidi found, “although child maturation likely plays a role in this trend.”

Rachidi agrees that the need for more child care resources for low-income families remains. “That existed even before the pandemic,” she said. 

But she thinks the argument that the pandemic showed a child care shortage that reduces labor force participation is “overblown.” Not everyone needs child care support, she said, “so I do not support the need for providing child care subsidies for everyone.”

Glass counters that “without the eviction moratorium and direct cash payouts, many of these families would have suffered tremendously without mom’s earnings during that time … so the notion that we need no long-term solutions to work-family issues is simply untrue.”

“We got lucky this time with swift moves by Congress to bail out families, but that doesn’t solve the longer-term problem of families with kids not having enough ongoing support and suffering economically from these career interruptions for child care,” she said.

Need for paid leave

Although paid leave helped many employees, the survey found gaps.

The United States had no paid leave policy when the pandemic began, but Congress passed the Families First Coronavirus Response Act in March 2020, which provided two weeks paid sick leave and up to 10 weeks of family and medical leave to those working at companies with 500 or fewer employees, the report said. Larger employers were excluded on the theory they already had or could afford to offer paid leave. 

The temporary federal paid leave policy ended in December 2020.

Rachidi said the number taking leave increased throughout the pandemic, most often for one’s own illness. 

“Notably, the vast majority of leave was fully paid across all waves of the survey,” the report said. It added, “Importantly, on each survey wave, approximately half of those who reported an unmet need for leave took some leave during the prior six months. For these workers, presumably the need for leave was greater than they were able to take.”

Many employees said they didn’t take the leave they needed because they had too much work, especially high-wage workers in the early survey.

So even without a government leave program, Rachidi said half the sample reported having access to paid leave from their employer, and one-third reported taking leave — most of it paid — in the later data waves.

While she believes states or the federal government could fill gaps in paid leave programs, she worries that if the government itself provides paid leave, employers would stop, making taxpayers responsible for the full cost. And given that “too much work” was one of the top reasons people didn’t take leave, universal paid leave likely won’t affect the decisions of those people very much.  

“Why is crowding out benefits that employers already provide a bad thing?” Glass countered, noting that being the good guy who takes care of employees puts companies at a competitive disadvantage financially against companies that don’t.

“Shifting things like paid family leave to the state as a public program means all businesses compete on an even basis and no employer gets ahead by mistreating their workers. And it only costs a very small tax on all workers and employers to fund, as state experiments have shown,” she said.

Glass believes having everyone pay a small tax to fund programs everyone needs at some point is not only fair but has been proven by multiple types of insurance that work that way.

“Do we complain about auto coverage in years we don’t have an accident and the money goes to other people’s accidents? No, because eventually we will have our own accident and be covered,” she said.

Most surveys show fewer than 40% of U.S. employees have access to paid family leave, though some have access to paid sick leave, Glass said. And not all companies with sick leave extend it to care for sick loved ones.

Who helps? Who should?

The survey found that people got help from lots of sources during the pandemic, including financial help from family members and support services from food banks and churches, among others. “This suggests that private or charitable support was also an important resource to households throughout the pandemic, with some of it a new experience. Although only 8% of working-age adults reported using a food pantry or soup kitchen in July 2020, 42% of those who used it reported that they had never used one before.”

Rachidi said attitudes about government assistance shifted over time, regardless of political affiliation. In July 2020, most who said they were or leaned to being Democrats said they supported spending government money on those who lost jobs, were low-income or were working families with children. About half of independents said the same. The share of Republicans or conservative leaners was smaller. 

Rachidi highlighted worries about becoming dependent on the government. By September 2021, “about 9 in 10 Republicans were somewhat or very concerned about people becoming dependent on the government and well over half of independents felt the same,” she said.

In 2021 waves, the survey found about 40% of Democrat leaners, 50% of independents and 80% of Republican leaners said they were “somewhat or very concerned: about permanent expansions to government.” 

The survey found that fewer households received unemployment insurance over time, but participation in other income-support programs remained consistent over time.