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Economist cites challenges for employers with loss of federal subsidies for childcare

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Human Resources Director, October 2023

Pandemic-era federal subsidies for childcare came to an end last weekend, and, as a result, 220,000 providers that depended on the program lost crucial income. It’s a huge setback for women workers, said economist Dr. Alicia Sasser Modestino, Research Director of the Dukakis Center for Urban and Regional Policy at Northeastern University. Sasser Modestino has done extensive research into the impact of childcare on the workforce, and said that the funding stoppage comes just as women are hitting an important milestone.

More women are in the workforce now since before the pandemic, she said, a direct result of the 2021 $24-billion American Rescue Plan, which expired this month. In January 2020, women had just exceeded being half of all workers in the workforce, Sasser Modestino said, a benchmark that had never been seen before.

“And then the pandemic hits in March 2020, and wipes out that progress entirely and set women back for several years,” she said. “We’re at this moment where recently, over the last six months, we’ve seen that women have not only recovered in terms of their labor force participation, but it’s actually at its highest level ever.”

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