The Hidden Costs of Childcare Gaps on the Workforce

Beyond Benefits: Why Childcare Is Workforce Infrastructure

In practical terms: every percentage-point drop in women’s labor force participation equates to over a million fewer workers contributing to the economy.

When employers talk about labor shortages, they often focus on pipelines and pay scales. Yet one of the most powerful—yet solvable—drivers of lost productivity is hiding in plain sight: childcare and true family support.

The Dual Crisis of Cost and Capacity

According to the U.S. Chamber of Commerce Foundation, the lack of affordable, reliable childcare costs the U.S. economy $122 billion each year in lost earnings, productivity, and tax revenue. But the crisis isn’t only about cost—it’s also about capacity.

The pandemic permanently altered the supply of care. The National Association for the Education of Young Children (NAEYC) reports that 16,000 childcare programs closed between 2020 and 2021, and most never reopened. Texas alone lost 16 percent of its licensed childcare capacity, while Florida’s Duval County saw a 12 percent drop. Even by 2024, families across the country remained on months-long waitlists despite being able to pay.

The Workforce Impact in Numbers

Before the pandemic, the labor force participation rate (LFPR) for women had been holding steady at about 57 percent, compared with 69 percent for men. These percentages represent the share of each gender’s civilian population aged 16 and older who are either working or actively seeking work. In 2019, that translated to roughly 83 million men and 74 million women in the labor force.

When schools and childcare centers shut down in 2020, the gap widened sharply. Women’s participation fell more than a full percentage point—to 56.2 percent—and their headcount in the workforce dropped to about 72 million, a loss of more than two million workers in a matter of months. Men’s participation, by contrast, slipped only marginally.

Even as recovery progressed, the rebound for women lagged. As of mid-2025, the rate has climbed only slightly to 58 percent, still below pre-pandemic levels. The Census Household Pulse Survey reveals why: women continue to cite childcare as a barrier two to three times more often than men. In 2024, 5.7 percent of working-age women—roughly one in fourteen nationwide—said childcare prevented them from working full-time or at all.

What These Percentages Really Mean

Every lost percentage point in women’s labor participation equals more than a million fewer active workers—not counting ripple effects on household income, employer turnover, and tax revenue. Fewer women in the workforce also erodes gender-diversity pipelines and pushes back corporate DEI progress by years.

For Employers, This Is an Infrastructure Problem

HR leaders often frame childcare support as a “benefit,” but it’s closer to an essential service. When employees can’t find dependable care, absenteeism rises, projects stall, and turnover costs mount. The Bureau of Labor Statistics estimates that 60 percent of non-working parents with children under five name childcare as their primary barrier to employment. Half of working parents have considered leaving their employer because of inadequate childcare support.

Rethinking Solutions

Traditional employer childcare programs—like daycare discounts or EAP hotlines—address only part of the problem. The modern workforce needs new models that reflect today’s realities:

• Flexible family stipends that parents can use for tutoring, after-school, or seasonal programs.
  
  

• Partnerships with local co-working or enrichment hubs even fully remote parents still need socialization and support.
  
  

• Adjusted schedules or hybrid options to accommodate inconsistent school calendars.
  
  

These strategies acknowledge that “childcare” doesn’t stop at preschool. The daily balancing act between work and family extends through adolescence—and so should employer support.

The Bottom Line for HR

Childcare is not a personal issue; it’s a systemic workforce constraint that directly affects business performance. Forward-thinking employers who treat it as infrastructure—rather than a perk—gain a measurable edge in retention, productivity, and reputation.

About the Author

Danielle Raschke is the Founder of OurVillageHQ - https://vhq.life — Soon to be Jacksonville’s first family coworking center, designed to bridge the gap between work and care by combining professional workspace with enrichment and community programs for children. OurVillageHQ is redefining what it means for employers to truly support families in today’s evolving workforce. Opening Q1 2026 - Taking anchor employer sponsorships now.

Want to support your working parents? Learn more about employer partnership opportunities at www.vhq.info or contact care@vhq.life.

Sources

• U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey (CPS). https://www.bls.gov/cps/
  
  

• U.S. Census Bureau. Household Pulse Survey (HPS). https://www.census.gov/programs-surveys/household-pulse-survey.html
  
  

• National Women’s Law Center (2021). Nearly 2.5 Million Women Have Left the Labor Force Since the Start of the Pandemic. https://nwlc.org/resource/nearly-2-5-million-women-have-left-the-labor-force-since-the-start-of-the-pandemic/
  
  

• U.S. Chamber of Commerce Foundation (2023). Untapped Potential: How Childcare Impacts the Workforce. https://www.uschamberfoundation.org/reports/untapped-potential-how-childcare-impacts-workforce