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Impacts of COVID-19 on the child care sector: Evidence from North Carolina

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Description:

COVID-19 has created acute challenges for the child care sector, potentially leading to a shortage of supply and a shrinking sector as the economy recovers. This study provides the first comprehensive, census-level evaluation of the medium-term impacts of COVID-19 on the county child care market in a large and diverse state, North Carolina. We also document the disproportionate impacts of COVID-19 on different types of providers and disadvantaged communities. We use data from two time points (February and December) from 2018 to 2020 and a difference-in-differences design to isolate the effects of COVID-19. We find that COVID- 19 reduced county-level child care enrollment by 40%, and reduced the number of providers by 2%. Heterogeneity analyses reveal that family child care providers experienced not only less severe reductions in enrollment and closures than center providers, but a small growth in the number of family providers. Declines in enrollment were most substantial for preschool-aged children. COVID-19 did not appear to further exacerbate inequities in terms of enrollment amongst low-income communities, communities with a larger share of Black residents, or rural communities, although communities with a larger share of Hispanic residents had more provider closures. Our findings underscore the importance of family child care providers in the child care sector and providing continuing and targeted support to help the sector through this crisis. Implications for future policies are discussed. (author abstract)

Resource Type:
Reports & Papers
Country:
United States
State(s):
North Carolina

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