Interview with Kathryn Anne Edwards
A labor economist whose work explores how family policies — from paid leave to child care — shape labor markets, social mobility, and long-term economic growth, Kathryn Anne Edwards advises on workforce and economic policy and writes regularly for The New York Times, The Atlantic, and other national outlets. Her work brings rigorous analysis to a simple truth: Investing in care is investing in economic strength.
We spoke with her about what policymakers often get wrong — and how common-sense reforms would strengthen families and the economy.
What advice have you given to states about developing a strategy around universal childcare?
The pitch I make to every state is you need a short game and a long game. You certainly need to figure out what you can do for families right now, but the long game is how do you get ready for a future federal commitment to childcare? If the federal government says, “We need to make sure there’s no childcare deserts within the next 12 months,” how would you go about ensuring that? This is going to be such a high stakes investment, so we need early wins. We need states to say, “New Jersey was ready and they were able to see this through,” because with the first sign of failure, someone’s going to jump on it and declare the money’s not worth it.
What do people often misunderstand about child care as an economic infrastructure issue rather than a social or personal issue?
Most people, either explicitly or implicitly, assume the government’s position on child care is an endorsement of a type of motherhood. If the government pays for child care, it’s because they’re saying working moms are better. If the government doesn’t pay for child care, it’s because women are supposed to stay home. Both are wrong and they distract from what is a practical issue in our economy — that the private provision of child care is a market failure.
It will only get more expensive and less available the longer we keep it a private market, so the government needs to intervene to ensure that people who want to have child care can get it. This isn’t analogous to being unable to afford Maine lobster or a house on the shore. That some people can’t afford child care causes real problems in our economy. From the economy’s perspective, this is a market that isn’t doing its job, and the longer that persists, the worse our economy will be for it.
What other policies would best help women stay in and advance in the workforce?
Child care is only one piece of the puzzle. Something that gets really discounted and underappreciated is the right to flexible work arrangements and part-time work. The U.S. doesn’t have a high-paid part-time labor market. Most of other industrialized countries do. They’ve written it into labor law. So women who have young kids at home negotiate that they keep their nice job — the job they went to school for, that pays well, where they’re on their career track — but they don’t work full-time.
They work half-time or three-quarters time for a few years and then they go back full-time. Economic research suggests that better workplace practices and labor regulations would make a bigger difference than child care because even if they have child care, most families don’t have coverage for an 8:00 a.m. to 6:00 p.m. workday. They don’t have days off that correspond with vacation days at child care centers or schools. And they don’t have after-school care. And what about people who work overnight shifts at hospitals or in hotels, or work 7:00 a.m. to 7:00 p.m. because they’re at a police department? None of these people have easy access to child care. We know all of this, and yet we don’t do anything about it.
if women didn’t want high-quality, part-time work, we wouldn’t have multilevel marketing in the U.S. We wouldn’t have Mary Kay or Tupperware. I think tradwives on social media, like health influencers and cultural influencers, are the newest version of multilevel marketing. They’re not selling Tupperware anymore, they’re selling visible displays of lifestyle, setting up a camera system to record them at their best, talking about how great their lifestyle is, and often selling products for you to achieve that lifestyle or finding other ways to monetize their efforts. Women want to earn money for their families and do it in a way that’s flexible. The labor market doesn’t provide it for them, so they go to alternative sources. Flexible arrangements would serve so many others as well — people who require a lot of medical visits for their own health conditions, or who are caring for a sick parent, partner, or child. They all could benefit.
How does the gender pay gap exacerbate these challenges for women?
The gender pay gap is proof positive that what we have isn’t working. The gender pay gap before motherhood and the gender pay gap after motherhood are two very different things. The labor market has a near equality between the genders until someone has a kid and then all the things that our labor market does well fall apart for women because someone has to stay home. We don’t have paid family leave, we don’t have childcare, we don’t have flexible work arrangements. Health insurance starts to get difficult for families because someone must continue working full-time to secure it for the family. That we’ve made no progress on this issue and that the gender pay gap has increased over the past two years is an indication that our current approach isn’t working and we need to try something else.
Were we to have a world with paid family leave, with free and universal childcare, with the right to work with flexible schedules, women wouldn’t earn as much as men, but I think it would be a function of their empowerment and preferences to keep working as opposed to the labor market not working for them. Equality doesn’t have to mean 100 cents on the dollar. Equality can be that everybody gets a chance to choose the career and the labor market path they want. That choice doesn’t necessarily mean the same outcome, and we wouldn’t expect it to. I take the gender pay gap on face value of whether or not it’s a function of preferences or constraints. Right now it’s a function of constraints. I would absolutely cheer an 80 cents on the dollar pay gap if it were a function of empowered preferences.
Does having universal pre-k programs strengthen or strain the child care market?
Pre-K produces massive dividends. Children get early exposure to literacy and numeracy in pre-K, and the transition to full-time public school investments also benefits their families. If you give parents an extra year of full-time child care, they’ll earn more money for the next seven because the labor market is path-dependent, and what you earn in one year is very much contingent on what you earned the year before.
The city of New Haven had a universal pre-K program open up with a lottery for available spots. A group of economists studied the parents who were accepted through the lottery and got access to full-time, full-day pre-K and that resulted in their having 8 to 10% more in income. That makes a huge difference for families, and the income helps children potentially as much as being in the classroom because income determines so much of a kid’s outcome. Opening up universal pre-k programs is an unequivocal good. But should it be run through the public school system or through a reimbursement provider model?
Washington, DC is the only school district in the country that guarantees access to two years of free preschool for anybody who wants it as it’s administered through the public school system. This has hurt their child care market because four- and five-year-olds not only are the cheapest kids in terms of both ratio and cost, but they’re also higher in enrollment numbers.
People are much more likely to put a four-year-old into child care than they are a four-month-old. As a result, the DC child care market is the most expensive in the country because it’s serving the zero-to-three population as opposed to zero-to-five. DC has been trying to stabilize the child care market by aggressively expanding its subsidy program for low-income families and raising child care workers’ salaries.
Other localities have been offering different versions where kids, for example, go to a pre-k that’s not attached to the public school system, but the government still pays for it. That can stabilize providers because they have the mix of kids that make it easier for their center to operate, but it increases the amount of regulation and these providers don’t get to turn kids away if they want to get reimbursement from the city.
What would good family policy look like?
People have strong preferences and beliefs over what’s the best type of care. But a cold-hearted economist would point out that whatever the care arrangement, rich moms will find the best version of it. In the data, in terms of quality, it doesn’t matter where a rich woman goes, she will buy the best care for her kid in any type of market, whether that’s her staying home, a relative staying home, going to a family home-based center, having a nanny, or going into center-based childcare, the rich mom will get the best version wherever. We have this notion of “well centers are best because they’re like schools, or homes are best because they’re like families, or it’s important that you’re with relatives, or that you stay home with the mom.” But it turns out that it’s the mom’s education and income that predicts quality over every type.
It’s very disempowering to say, “Sorry, your income is what is best for your kid because this is a private market.” But If I were to ask, “Who can buy the nicest shoes being sold?“ you’ll say rich people. “Who will have the nicest restaurant experience if food is being sold?” Rich people. “Who is going to have the nicest car if cars are being sold?” Rich people. So if care is being sold, who will have the best care? Rich people.
I can pay three grand a month for my kids. Someone else can only pay $750. Who’s going to have better childcare? What the government needs to do when it sets out a child care policy is neutralize the income effect so every center is catering to children and not to parents’ income. This is about making investments in centers, investments in staff, and making all kids worth the same amount of money — which they are not now.
What is the most effective way for the government to neutralize this income effect?
The way the government can do it is by paying providers more and by letting the public dollars mimic a high-income parent buying care so all sites have money for capital investments, high-quality food, and staff that is well-paid and trained and invested in, because people make the biggest difference.
In my mind, a well-designed child care system would incorporate all the providers we currently have, because parents have a lot of preferences and a lot of needs. For example, the care provided by relatives, friends, or family — much of it is a wraparound for other types of care. We want to give justice to people who provide care, but we also want to give them resources. A big challenge today is that the requirements for licensing a center, even in a home, are so high that relatives just can’t meet them. They watch a kid in their living room, but they’re supposed to have a dedicated space. That’s impossible for them. I think there’s a way to meet them where they are and still have quality and pay, as opposed to making them transform.
From your standpoint as an economist, what do you think is the most effective way to capture the return on investment on universal child care? Are there metrics that go beyond GDP growth or workforce participation?
Regarding things we can measure, the biggest windfall will be for family income, in two directions — parents being able to work more and family budgets not having to be used on childcare. With the latter, families can spend that money on other expenses. The resulting higher earnings and higher consumption gets filtered back into our government via tax dollars, either on the income tax side or the sales tax side, which is a return on investment. But really, this is about families, and whether they’re able to make the choices that they want. And to the extent that the answer is “no” because of some barrier or policy or something in our economy that’s fixable, it’s a failure.
The ability for families to not have child care dictates their choices, but to have their choices dictate child care, you can’t really measure that. We can say that child care was really constraining people’s ability to make choices for their family, but that’s not measurable. We have ways of looking at fertility, labor force participation, household spending for families who have a kid under five. We can measure all kinds of things, but we aren’t getting at the intangible, which is: It’s 2025 and you live in America — are you able to make choices for your family or is a private market making them for you? We can’t change everything, but if we let this continue, we’ve basically chosen the policy of making kids a luxury good.
Paid family leave intersects with the childcare equation. What are the challenges to having a more robust paid family leave policy across the country?
The more generous we want paid family leave to be, the more obvious it becomes that our employer-sponsored health insurance tether holds us back. Why would it matter to an employer that you’re gone for three months as opposed to six months? Because they’re paying for six months of health insurance. In an ideal world, paid family leave is run through the Social Security Administration, similar to New Jersey, where it’s run off a payroll tax. Workers pay for it with their contribution so everybody can get it and it’s some type of percentage wage reimbursement that employers can top up. So I get 75% of my prior salary during paid family leave, and my employer benefit is that they bring it up to 100% for the first four weeks.
But employers can’t pay for people’s health insurance for six months. In practicality the people who will be able to take a six-month leave are the ones who won’t lose health insurance in the meantime. If you tell employers, “You have to provide health insurance for six months to a year for people who aren’t working for you,” that’s way too expensive to put on employers, and there’s no way that won’t come back to hurting women. There’s a concern employers wouldn’t hire women of childbearing age because they come with a one-year health insurance penalty, or that they would pay women of childbearing age less in anticipation of them needing paid family leave.
Nothing changes unless we admit our economy is warped by having health insurance tied to employers. That’s a very tough conversation to have. Employers don’t want to pay wages for people who aren’t working and to deal with that we can attach the covering of wages to Social Security. But they still have to pay for employees’ health insurance. People understand that child care will be for six months to three years. Preschool will be for ages three and four, kindergarten is going to pick up at age five, but that initial six months has to come from paid family leave. It’s too long a period of time for employers. And that’s the real barrier to it.
How could we address this? One option to consider as part of the solution is universal access to Medicaid for all children. Half of children in the U.S. are on Medicaid. They account for 15% of total Medicaid spending because kids are cheap to insure. They go for regular appointments, but they don’t have chronic disabilities or die, which is the most expensive part of the healthcare system. Universal Medicaid access for children won’t increase Medicaid’s costs by that much and then it makes it easier to have paid family leave because you’ve taken coverage for kids off the table.
What final point do you want to drive home to policymakers and the public about child care?
Universal child care helps families invest in children in a way that they’d like. That’s a win — particularly as there’s so much inequality in childhood poverty that the government can’t fix. The government doesn’t get to send everybody to Disneyland. Not everybody gets Christmas trees. Not everybody has their mom show up in a nice car or brings in photos from a vacation for show and tell. Those are all things that our economy will determine. But child care is an investment the government could easily make. It won’t fix everything, but we know it’ll help a lot.
We get so caught up in “what is the role of the government?” and “what is the right type of motherhood?” when those are all distracting conversations. The result is that we hold ourselves back in the economy, in family well-being, and in investment in children — instead of committing to one important thing we can do.