American women are having fewer kids than they’d like. By one estimate, the average fertility gap—the distance between a woman’s ideal number of children and achieved fertility—for U.S. women is 0.76, close to one child. That figure, though, varies significantly between states: in North Dakota, the gap is one-third, while in New Hampshire, Rhode Island, and Alaska, it’s greater than one child.
These state-level differences help us investigate how state policy could be shaping family decisions. Affordable childcare options are key for young families, and regulations of childcare vary greatly by state. Using the fertility-gap metric and a novel Childcare Regulations Index, we set out in a recent working paper to understand just how pertinent childcare regulations are when it comes to the gap between ideal and achieved family size.
States with more flexible childcare regulation, it turns out, have smaller fertility gaps than states that impose heavier regulatory burdens. After imposing a host of demographic controls, we find that a one-point increase in childcare freedom on a zero-to-ten scale is associated with a reduction in the fertility gap of about 0.025 children. The policy implications are obvious: overzealous childcare regulations are one obstacle keeping Americans from having as many kids as they want.
For example, imagine that Vermont (the most heavily regulated state) matched the regulatory environment of a middle-scoring state like North Carolina. Our results show the fertility gap would shrink from 0.78 to 0.68 children per woman—a 12.5 percent change—without additional subsidies or cash transfers.
The results increase in magnitude when the sample is restricted to women under 35 and remain stable for women currently in the workforce, ruling out the possibility that women disconnected from childcare might be driving results. They also hold up under an “instrumental-variables” approach designed to address the concern that some unobserved state characteristic other than regulation might be driving both looser rules and higher fertility. A robust childcare market appears to make a big difference in family decisions.
These results highlight the way work-family compatibility—the ease with which people achieve their desire for both career and family—influences fertility decisions. The data reveal that regulations make it harder to find the right childcare fit. Childcare regulations make the service more expensive by tightening staff-to-child ratios, ramping up credentials, or limiting classroom capacity. Worse, they eventually run providers out of the market and limit the range of childcare options available to parents. States with lower scores on the Childcare Regulations Index report a higher percentage of parents expressing difficulty finding childcare and a greater reduction in home-based childcare providers over the past decade, on average.
Continue reading at City Journal.
Anna Claire Flowers is a family policy fellow at the Archbridge Institute and lead author of the “State Childcare Regulation Index.” She is an assistant professor of economics in the Campbell School of Business at Berry College in Georgia. She studies the impact of economic policies on family formation and family decision-making. She received her Ph.D. in economics from George Mason University and a dual B.A. in public administration and economics from Samford University.
Vincent Geloso, PhD, is a social mobility fellow at the Archbridge Institute and co-author of the institute’s “Social Mobility in the 50 States” report. He is senior economist at the Montreal Economic Institute and an assistant professor of economics at George Mason University. He specializes in economic history and the measurement of living standards today and in the distant past. Dr. Geloso earned his Ph.D. in economic history from the London School of Economics and Political Science and his undergraduate degree in economics from the University of Montreal.
Clara E. Piano, PhD, is a family policy fellow at the Archbridge Institute and co-author of the “State Childcare Regulation Index.” She is a visiting assistant professor of economics at the University of Mississippi. Her primary research interests are in the institutions that undergird markets—such as law, family, and religion. Dr. Piano earned her Ph.D. in economics from George Mason University.
Lyman Stone is a senior fellow and director of the Pronatalism Initiative at the Institute for Family Studies.
Economics of Flourishing
American women are having fewer kids than they’d like. By one estimate, the average fertility gap—the distance between a woman’s ideal number of children and achieved fertility—for U.S. women is 0.76, close to one child. That figure, though, varies significantly between states: in North Dakota, the gap is one-third, while in New Hampshire, Rhode Island, and Alaska, it’s greater than one child.
These state-level differences help us investigate how state policy could be shaping family decisions. Affordable childcare options are key for young families, and regulations of childcare vary greatly by state. Using the fertility-gap metric and a novel Childcare Regulations Index, we set out in a recent working paper to understand just how pertinent childcare regulations are when it comes to the gap between ideal and achieved family size.
States with more flexible childcare regulation, it turns out, have smaller fertility gaps than states that impose heavier regulatory burdens. After imposing a host of demographic controls, we find that a one-point increase in childcare freedom on a zero-to-ten scale is associated with a reduction in the fertility gap of about 0.025 children. The policy implications are obvious: overzealous childcare regulations are one obstacle keeping Americans from having as many kids as they want.
For example, imagine that Vermont (the most heavily regulated state) matched the regulatory environment of a middle-scoring state like North Carolina. Our results show the fertility gap would shrink from 0.78 to 0.68 children per woman—a 12.5 percent change—without additional subsidies or cash transfers.
The results increase in magnitude when the sample is restricted to women under 35 and remain stable for women currently in the workforce, ruling out the possibility that women disconnected from childcare might be driving results. They also hold up under an “instrumental-variables” approach designed to address the concern that some unobserved state characteristic other than regulation might be driving both looser rules and higher fertility. A robust childcare market appears to make a big difference in family decisions.
These results highlight the way work-family compatibility—the ease with which people achieve their desire for both career and family—influences fertility decisions. The data reveal that regulations make it harder to find the right childcare fit. Childcare regulations make the service more expensive by tightening staff-to-child ratios, ramping up credentials, or limiting classroom capacity. Worse, they eventually run providers out of the market and limit the range of childcare options available to parents. States with lower scores on the Childcare Regulations Index report a higher percentage of parents expressing difficulty finding childcare and a greater reduction in home-based childcare providers over the past decade, on average.
Continue reading at City Journal.
Anna Claire Flowers
Anna Claire Flowers is a family policy fellow at the Archbridge Institute and lead author of the “State Childcare Regulation Index.” She is an assistant professor of economics in the Campbell School of Business at Berry College in Georgia. She studies the impact of economic policies on family formation and family decision-making. She received her Ph.D. in economics from George Mason University and a dual B.A. in public administration and economics from Samford University.
Vincent Geloso
Vincent Geloso, PhD, is a social mobility fellow at the Archbridge Institute and co-author of the institute’s “Social Mobility in the 50 States” report. He is senior economist at the Montreal Economic Institute and an assistant professor of economics at George Mason University. He specializes in economic history and the measurement of living standards today and in the distant past. Dr. Geloso earned his Ph.D. in economic history from the London School of Economics and Political Science and his undergraduate degree in economics from the University of Montreal.
Clara E. Piano
Clara E. Piano, PhD, is a family policy fellow at the Archbridge Institute and co-author of the “State Childcare Regulation Index.” She is a visiting assistant professor of economics at the University of Mississippi. Her primary research interests are in the institutions that undergird markets—such as law, family, and religion. Dr. Piano earned her Ph.D. in economics from George Mason University.
Lyman Stone
Lyman Stone is a senior fellow and director of the Pronatalism Initiative at the Institute for Family Studies.
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