The report describes child care as "a crucial and underfunded part of the American economy" and makes the case for increased government investment, including universal preschool for children 3 and 4 years old.
"Several market failures help explain why the current system is unworkable," the report says. These market failures include how parents of young children are often at early stages of their careers and not earning as much as they would later, and are generally unable to borrow against future savings. It also claims that because child care workers are predominantly women and "disproportionately women of color," the child care system "likely benefits from existing discrimination in labor markets."
Government assistance with child care is necessary, the report says, as approximately 20% of children from infancy to age 5 live with only their mother and women very often have to make career-related decisions based on child care options. It also discusses the developmental benefits children gain from quality early childhood education as well as the societal benefits this yields.
"Additional evidence suggests that children who participate in organized early childhood programs are less likely to commit crimes later in life, which benefits the potential victims of those averted crimes and reduces expenditures in the criminal justice system," it says.
Despite this, the report says, "[t]he United States invests fewer public dollars in early childhood education and care relative to gross domestic product (GDP) than almost all developed countries," placing 35th out of 37 countries tracked by the Organisation for Economic Co-operation and Development.
On the other side of the equation, the report notes that child care workers often "are paid little and have high rates of turnover."
Additionally, the report calls for a federal family and medical paid leave program to help parents care for newborns.
"It’s past time that we treat childcare as what it is – an element whose contribution to economic growth is as essential as infrastructure or energy," Yellen said in a statement. "This is why the Biden Administration has prioritized the Build Back Better proposals, many of which are now moving through Congress. Enacting them is the single most important thing we can do to build a stronger economy over the next several decades."