Should a mom stay home because of the cost of child care? A new study says no | Canada Voices

You might have heard of this kind of kitchen-table math: A new parent (usually mom) would make barely enough to pay for child care if they went back to work, therefore they should just stay at home. I always found this reasoning odd.

To be clear: For many people, the decision to stay at home with young children is about much more than financial factors. And I have zero issues with whatever parents believe is best for them and their families.

But if the deciding factor is the math, then let’s do the math properly, shall we?

That means taking into account the long-term financial repercussions of taking years off work. And new research by a trio of Canadian and American economists offers some solid evidence for what I and many others have long suspected: Those repercussions are significant.

The study finds that Quebec’s subsidized child care program led to mothers both working more and earning more for decades, long after their kids aged out of the system. Although the research is focused on public policy, there is a clear personal finance takeaway there.

I reached out to Kevin Milligan, one of the authors of the study and a professor of economics at the University of British Columbia. Here’s our interview, edited for flow and length.

Your research finds that Quebec’s child care program boosted both employment and earnings for mothers through several decades – that’s compared with what?

The comparison is to imagine a world where the program wasn’t in place. How much more are Quebec mothers working and earning? We suggest that child care might be putting working mothers on a different trajectory than they would have been in the absence of the program.

You found that affordable child care resulted in mothers working more well beyond the years when their kids were in care. How?

One way to think about that is the skills you might learn in the workplace.

If you’re out for a short maternity leave, you come back, things are pretty much the same. But if you’re out for, like, three or four years – just think of something contemporary here – you come back and all of a sudden your office is full of people running Claude Code and autonomous agents doing stuff. You’re like, “What the hell is this? This wasn’t here four years ago.”

You feel like the job market has moved on from you, and the skills you had have depreciated. That might lead you to stay out of the labour market more.

What about earnings? How might child care boost mothers’ earnings for decades after their kids were in care?

With the continuity of work experience that is made affordable by the child care program, mothers are able to have that better lifetime career trajectory.

In our study, that starts to pay off for women in their 40s. By then, we find that women are working in more responsible jobs. For example, they’re more likely to be a manager and they are earning more per hour.

What’s interesting is this effect accelerates over time. By the time mothers are in their 50s, it leads to a fairly substantial increase in earnings.

How much more did Quebec mothers work and earn thanks to the child care program, according to your research?

For women at age 50, we calculate a roughly 12 percentage point boost to employment.

We found a 27-per-cent increase in earnings for women at age 50, which is really kind of big. About half of that is the fact that more mothers are working, so there’s fewer people with zero earnings. The other half comes from the benefits of having stayed in the workforce, gained experience and kept skills up to date.

What do these findings mean for parents weighing whether to step out of the workforce for a few years?

What we can contribute is to say there are some dollars on the table there, and that’s what you have to consider. The open question is whether people see those dollars.

But we can say, yes, there are lifetime higher earnings available for most women.

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