To Address the Financial Health Gender Gap, Let’s Fix the Care Economy

New survey data finds lack of affordable, reliable childcare holds women back from working.

Tuesday, March 8, 2022
 To Address the Financial Health Gender Gap, Let’s Fix the Care Economy

Each March during Women’s History Month, the international community comes together to celebrate women’s achievements and envision a gender-equal world. However, globally and in the United States, much work remains to close the gap on wages, opportunities, recognition, and financial health. 

The Financial Health Pulse™ U.S. Trends Report has consistently demonstrated a substantial gender gap in financial health, with women reporting lower levels of financial security than men. One significant factor contributing to this gap is the lack of a supportive, affordable care infrastructure that enables women to meet both family and work responsibilities. Data regularly show that women continue to carry the majority of the responsibility for caring for children; without quality options for child care, women are being pushed from the workforce. This comes with enormous repercussions for both economic productivity and women’s financial futures. 

The Cost of Child Care Is Driving Women From the Workforce

Some parents make the choice to stay at home or work limited hours, but others – particularly women – feel they have no other options. 

In late 2021, the Financial Health Network conducted new research into the financial health of women in America. We found that, of mothers who have preteen children and work part time or not at all, 62% say high child care costs prevent them from being more active economically. In other words, these women want either to work or work more, but the staggering costs of child care make it impossible. 

Practically speaking, high costs mean it may not even make economic sense for some parents to work. The Department of Health and Human Services’ benchmarks suggest that, to be affordable, child care should take up less than 7% of a family’s annual income. Yet not a single state meets this affordability threshold; infant child care ranges from 9% to 36% of state median annual income, according to the Economic Policy Institute. 

Costs do not stop when children outgrow the infant stage, either. The Center for American Progress found that, even excluding summer breaks, many school districts close for an average of 29 days every school year. With many workers ineligible for any paid time off – let alone nearly six weeks – families must cover child care costs, paying an estimated $6,600 per year on average.

COVID-19 Has Made Reliable Child Care Elusive

During the pandemic, parents have also faced the challenge of simply accessing reliable, safe child care. Successive waves of COVID-19 variants have led to innumerable quarantines and more rounds of closures, particularly in early childhood education: An estimated 9% of child care centers have permanently closed since the pandemic began. Suffering from burnout, educators have been leaving the workforce in droves. 

Our survey found that this unpredictability keeps mothers out of the workforce. Among women who have children under 12 and either are stay-at-home parents or work part time, 54% agree that they would like to work or work more, but have trouble finding reliable child care. 

Our Care Economy Is Failing Women

The pandemic has weighed particularly heavily on mothers, especially mothers of color, who often have to manage the impossible task of juggling child care and work. After two years of the pandemic in the United States, mothers have reached a breaking point. The lack of affordable, reliable child care has contributed to many women dropping out of the workforce. This reduced income-generating activity has enormous implications for women’s earning potential and financial stability, both now and for decades into the future.

There are vast takeaways here for both policy design – where existing incentives and systems favor single-breadwinner families, and women of color bear the brunt of limited support systems – and for workplaces – where equality won’t be realized until people of all gender identities feel confident that they can care for their loved ones while delivering on their work responsibilities. Supports like affordable child care, paid family leave, paid vacation time, and universal early education would help bring women back into the workforce and generate economic activity, contributing both to women’s financial health and the health of the economy overall.   

With support from Principal Foundation, the Financial Health Network is looking deeply at women’s financial health in America, with key lenses on race, age, marital status, and parental status. Our report, forthcoming in June 2022, will dig into how women have managed their short- and long-term finances during the pandemic, juggled work and care commitments, and thought about their financial goals and outlook. We’re interested in engaging with others who are working on or researching this important topic. Please contact to learn more, or visit

Methodology Notes

In November-December 2021, the Financial Health Network conducted a nationally representative survey among 1,000 men and 2,000 women, oversampling for Black and Latina women. Our survey also collected data from 29 people who identified as nonbinary, gender nonconforming, genderqueer, or another gender. This analysis focuses primarily on women and men, given the larger sample sizes. Full research findings will be released in June 2022.

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