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A CBO Roadmap to Near-Universal Healthcare

 On October 1, the Congressional Budget Office released a detailed report, Policies to Achieve Near-Universal Health Insurance Coverage. The report outlines…

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On October 1, the Congressional Budget Office released a detailed report, Policies to Achieve Near-Universal Health Insurance Coverage. The report outlines four broad approaches to the long-sought goal of universal, affordable access to healthcare for all Americans. The CBO cautiously aims only for near-universal coverage, which it defines as coverage for at least 99 percent of the population. The report argues that 100 percent coverage is unattainable, since some people would inevitably decline to participate–even if they were eligible at no cost–on religious grounds or because they did not want to bring themselves to the attention of authorities, among other reasons.

Each of the four approaches offers potential improvements over what we now have under the ACA, and ways out of the unthinkable chaos of a court-ordered end to the ACA, with no viable replacement. The alternatives range from a Sanders-like single-payer plan bold enough to appeal to the most progressive Democrats, to others that are sufficiently market-oriented to pass judgement with any but the most curmudgeonly Republicans. One of the CBO’s alternatives squarely hits the sweet spot of radical moderation– the Niskanen Center’s hallmark.

Here is a brief outline of the four approaches, with some pros and cons of each. 

Approach 1: A partially subsidized, add-on default plan. 

This approach expands the alternatives already available under the ACA by adding a default plan that would be available to everyone not otherwise eligible for subsidized coverage, while leaving existing policy largely unchanged in other respects. The default plan would include both premium subsidies and cost sharing, with zero cost to the poorest participants. The default plan could be operated either directly by the government or by one or more private insurance companies. Although the CBO does not explicitly say so, Alternative 1 is essentially the approach endorsed by presidential candidate Joe Biden and the Democratic Party in the 2020 election.

Pros. Approach 1 would require a minimum of changes to existing law. One such change would eliminate the “coverage gap” for people with incomes below 100 percent of the federal poverty level (FPL) in states that have not expanded Medicaid. Another change would remove the so-called “firewall,” which is a rule that prevents people with a credible offer of employer-sponsored insurance (ESI) from taking advantage of subsidies and cost-sharing reductions available on ACA exchanges. Eliminating the firewall would moderate the many negative effects of tying health insurance to jobs

The CBO argues that it would be impracticable to keep the firewall in pace while administering a subsidized default plan. However, under Approach 1, large employers would still be required to offer health insurance, ESI tax benefits would be retained, and ESI would continue to be a major coverage source.

Cons. Approach 1 would leave Medicaid and CHIP intact. That would leave the healthcare system for people with low incomes highly fragmented, both from state to state and by income, with adverse consequences for continuity of coverage and labor mobility. The Covid-19 pandemic has already shown how widespread job losses disrupt coverage, requiring many people to attempt the switch from ESI to Medicaid. Unfortunately, millions have reportedly fallen through the cracks and ended up with no coverage.

Also, even though it makes the fewest changes to existing law, the CBO warns that Approach 1 would pose the greatest administrative challenges of any of the proposals. One challenge would be monitoring everyone to determine who is or isn’t ‘ eligible for coverage other than the default plan. Another challenge would lie in collecting premiums, or taxes instead of premiums, from people whose default coverage is partially but not fully subsidized. Still, another problem would be notifying eligible people for default coverage, and ensuring that they actually enroll. Point-of-service enrollment could partly alleviate this problem, but that, too, has its administrative challenges.

Approach 2: A partially-subsidized default plan that replaces Medicaid and the exchanges

Like Approach 1, this strategy would introduce a partially-subsided default program with zero premium for people below the FPL. However, in this case, the default program would fully replace Medicaid, CHIP, and the nongroup policies currently offered on ACA exchanges. Medicare and TRICARE would continue as they now operate. Like Approach 1, it would eliminate the firewall but would continue to require large employers to offer ESI coverage. 

Pros. The big advantage of Approach 2 would be its defragmentation of healthcare coverage for the low-income population. Coverage, without change of doctors, networks, or costs, would continue smoothly in case of change in employment, loss of employment, or change in state of residence. Approach 2 offers flexibility concerning public vs. private insurers. The most likely variant for default coverage would be a Medicare-like public option with competing private plans along the lines of Medicare Advantage. ESI would continue to be mandatory for large employers, but the firewall would be eliminated. With a good public option in place, the voluntary exit rate from employer-based coverage would likely be greater than under Approach 1.

Cons. Because it is only partly subsidized, Approach 2 would suffer from some of the same administrative complexities as Approach 1. To get to near-universal coverage, middle- and upper-income beneficiaries would have to pay a premium or premium-equivalent tax. Computing the appropriate premium or tax would not be a trivial matter. It would be necessary to take household income into account, and regional and/or age-related risk factors and possibly tobacco use. Getting everyone enrolled would be another administrative headache. It would probably be necessary to have a point-of-service enrollment mechanism with some kind of retrospective premium  for people who did not voluntarily enroll in advance in the default program or an alternative. That could create unpleasant financial shocks for people not eligible for full subsidies. 

Approach 3: Default coverage through a fully-subsidized benchmark plan

This approach would represent a more far-reaching transformation of the American system of health insurance. The big difference between Approach 3 and Approach 2 is that everyone would automatically be enrolled in a benchmark plan for which there would be no premium or premium-equivalent tax. The cost of the benchmark plan would be covered from general taxation. The benchmark plan would include income-based deductibles and copays, and could be offered either by public or private insurers.

Pros. Alternative 3 would move the United States toward a  universal coverage system similar to those of other high-income countries in place of the patchwork system that exists under the ACA. Default enrollment in a zero-premium benchmark plan would be much easier to administer than a system based on mandatory premiums or premium-equivalent taxes. It would not be necessary to know people’s income at the time of enrollment. Anyone who did not enroll in advance (and there would be little reason not to do so) could be enrolled at a point of service, such as a hospital emergency room or community clinic, with no unpleasant surprises or retroactive premiums.

Approach 3 would effectively break the link between employment and health insurance. Employers would not be required to offer coverage. Depending on the benchmark plan’s generosity, some employers might continue to offer add-on benefits, such as help with deductibles, or to pay for vision and dental care if not covered by the benchmark plan. There would be no tax advantage but some employers might see extended coverage as a useful employee retention device.

The cost of Approach 3 would depend largely on the design of the benchmark plan. The Federal budget burden would be least if the benchmark plan included substantial income-based cost-sharing, as would be the case under a system such as the Universal Catastrophic Coverage recommended by Niskanen Center. The CBO report explains how a Niskanen-style UCC approach would fit with its Approach 3 as follows:

One variant would be to benchmark premium subsidies to a catastrophic plan with high levels of first-dollar cost sharing, such as a high-deductible plan. However, under the catastrophic plan, there would be no cost sharing for the treatment of chronic conditions and preventive services, such as vaccinations and prenatal care. Deductibles would vary on the basis of household income, and individuals whose income was below a certain level would not have a deductible. People could use their subsidy to enroll in a catastrophic plan at no cost or they could use their subsidy toward the cost of a more generous plan offered through a marketplace of private plans if they paid the additional premium. Under this variant, there also could be a public option in the marketplace. 

Alternatively, the benchmark plan could be something more generous, with cost-sharing that was less dependent on income, something like traditional Medicare or an ACA gold plan. As in other approaches, such a plan could be administered in a public, private, or hybrid version.

Cons. This plan would require more people to change their source of insurance coverage. If a more generous form of benchmark plan were adopted, Alternative 3 would require higher  federal expenditures than alternatives 1 or 2. Even so, this approach would fall short of the universal first-dollar coverage that many progressives prefer.  

Approach 4: A Single-payer system

In this approach, everyone would receive comprehensive coverage from a single public insurance plan. There would be no premiums. Cost-sharing would either be eliminated entirely or much reduced  compared to most of today’s insurance options. The single-payer system would replace all existing government plans, including traditional Medicare, Medicaid, CHIP, TRICARE, and the rest. There would be little if any role for private health insurance.

Pros. Bernie Sanders’ Medicare for All plan is the best-known proposal of this type. The popularity of Sanders’ plan stems in large part from the fact that it would fully relieve American families of the financial burden of major illnesses and injuries. A single-payer plan would, in many ways, be the simplest to administer. Backers argue that savings in administrative costs would substantially ease the burden on the federal budget. It would also make life easier for doctors, hospitals, and families, who now must find their way through a maze of different payment rules from different private and public insurers.

Cons. Even after administrative savings, a true single-payer system would be the most expensive option. Some critics are concerned that with no “skin in the game” in the form of deductibles or copays, patients would greatly increase their consumption of services.  Some research supports that conjecture, but some also  suggests that patients make poor choices when faced with high out-of-pocket costs. Rather than choosing good health care values, some studies suggest that they may forgo needed care because of the cost– but then spend on unnecessary care or  treatments that are doubtfully cost-effective. Whatever the case, it is clear that a single-payer system would need to rely more on administrative and less on market-based cost controls than would the other alternatives.

There are many unknowns about how a true single-payer system would operate in this country. Senator Sanders himself often says he wants America to have universal healthcare “like other rich countries,” but the fact is, no other country has anything like Medicare for All. The healthcare systems of other rich countries are very diverse in their structures. Even the most generous systems elsewhere require more by way of cost-sharing than would Medicare for All, and most do not have coverage that is as broad, especially for things like dental, vision, and long-term care. Also, many of Europe’s best systems, such as those in The Netherlands, Switzerland, and even the U.K., leave more of a role for private insurance companies. Some rely entirely on compulsory purchases of private coverage.

Conclusions

The CBO has done an excellent job of laying out the options. Nearly every pending healthcare bill or think-tank proposal fits somewhere within the CBO’s four alternatives. In keeping with its mandate of political neutrality, the CBO expresses no preference for one approach over another.

There is only one major point on which I disagree with the CBO report. That concerns their contention that implementing  any of their four approaches would  require additional federal tax revenue to achieve deficit neutrality. I do not think that is true for the UCC variant of Approach 3.

The problem is that the CBO has not asked the right question. Rather than setting a plan and then asking, “Could we afford it?” The right question is, “How generous a plan could we buy with the money the federal government already spends on healthcare?” 

Total federal spending now accounts for roughly 50 percent of total healthcare spending. My calculations suggest that money would buy a UCC benchmark plan, with no premium for anyone, that would cap total out-of-pocket medical spending, including deductibles and all other cost-sharing, at 25 percent of a household’s eligible income. (Eligible income means total income minus the FPL for that household.) Approximately 65 percent of the population would have health care expenses of no more than 15 percent of total income, including all households with incomes below 250 percent of the poverty level. More than 95 percent of households would have expenses of less than 20 percent of total income. 

Those numbers are based on 2017 levels of healthcare spending with no cost savings. Suppose a UCC plan included administrative and/or market-based cost-saving measures sufficient to reduce overall expenditures by 10 percent. In that case, the out-of-pocket maximum for a budget-neutral UCC benchmark plan could be held to 15 percent of eligible household income. If savings of 15 percent were achieved, the out-of-pocket maximum could be lowered to 10 percent. (See here, pp. 25ff, for the detailed calculations.)

But, as the CBO report reminds us, UCC is only one healthcare reform approach among many. The most important point to draw from the CBO’s work is that any of their four approaches would move us toward the goal of affordable healthcare access for all Americans, and a clear improvement over what we have now.

Previously posted at NiskanenCenter.org Photo courtesy of Pixabay

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Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing

Markets opened in the green today as they rebound from Monday’s losses.
The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock…

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Stock Market Today Mid-Morning Updates

On Tuesday, the Dow Jones Industrial Average is up by 270 points as it followed modest losses on Wall Street. Investors are still weighing the risks of red-hot inflation as rates continue to rise. Aside from the U.S., European Central Bank Leader Christine Lagarde downplayed recession concerns in the eurozone, already being destabilized by Russia’s war on Ukraine. She also says that her team is ready to raise rates at a faster pace if needed, in order to combat inflation.

Shares of Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) raised their dividends after passing their annual stress tests. For instance, Goldman Sachs is boosting its dividend payout by 25% to $2.50 per share. On the other hand, shares of Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are up today after China announced that it will be easing Covid-19 quarantine rules for international arrivals.

Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.13% today while Microsoft (NASDAQ: MSFT) is down by 0.79%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.17% while JPMorgan Chase (NYSE: JPM) is also up by 1.67%

Shares of EV leader Tesla (NASDAQ: TSLA) are up by 0.83% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are down by 0.17%. Lucid Group (NASDAQ: LCID) is down by 1.09% today as well. However, Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed today. 

Dow Jones Today: U.S. Treasury Yields Inches Higher; House Price Increases Slows Down In April 

Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading higher at 0.68%, 0.89%, and 0.31% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 0.28% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also up by 0.67%. 

The benchmark 10-year U.S. Treasury yield currently hovers around 3.22% as the market continues to push against a bear market. Oil prices rallied for the third day today as major producers like Saudi Arabia looked unlikely to be able to boost output significantly. This comes as the West agreed to explore ways to cap the price of Russian oil. Brent crude, for instance, currently trades at around $116 per barrel.

Home prices increased slower than before in April and could be a potential sign of a cooling in prices. Diving in, prices rose by 20.4% nationally in April compared with a year earlier. This is according to the S&P CoreLogic Case-Shiller Index. For comparison, home prices increased by 20.6% year-over-year in March. Cities like Tampa, Miami, and Phoenix continue to lead the pack with the strongest price gains. Tampa home prices, for instance, are up by a whopping 35.8% year-over-year.

[Read More] Top Stock Market News For Today June 28, 2022 

Trip.com Stock Gains Following Better-Than-Expected Quarterly Performance On Travel Rebound; China Covid Easing

Trip.com Group (NASDAQ: TCOM) seems to be among the top gainers in the stock market now. Evidently, TCOM stock is now up by over 14% at the opening bell today. Overall, this likely stems from the company’s latest financial update. Getting straight into it, Trip.com reported a quarterly loss per share of $0.01. Furthermore, the company’s total quarterly revenue is $649 million. For reference, consensus figures on Wall Street are a loss per share of $0.08 on revenue of $575.04 million. With these commendable results, investors looking to bet on the return of travel would be considering TCOM stock.

According to Trip.com, the company has recovering travel demand in global markets to thank for its latest quarterly performance. In particular, Trip.com highlights a bump in activity from consumers across its Europe and Asia Pacific user bases. This, the company believes, is a result of easing travel restrictions amidst countries in these regions. Moreover, Trip.com also notes that staycation-related travel in China is another notable contributor to growth for the quarter. Accordingly, its local hotel bookings are now up by 20% year-over-year.

On the whole, travel firms like Trip.com continue to thrive as consumers book their vacations. For its latest quarter, the company’s air-ticket bookings on global platforms are now up by a whopping 270% year-over-year. As mentioned earlier, this is mainly led by a rebound in demand from its European and Asian Pacific operations. Looking forward, CEO Jane sun notes that Trip.com will “remain adaptive to embrace the changing environment and be flexible with our strategies to swiftly seize growth opportunities.” With all this in mind, I could understand if TCOM stock is turning some heads in the stock market today.

TCOM stock
Source: TradingView

[Read More] Best Oil Stocks To Buy Right Now? 5 For Your Late June 2022 Watchlist 

Occidental Petroleum On The Rise Following Latest Berkshire Hathaway Stake Increase

Meanwhile, the likes of Occidental Petroleum (NYSE: OXY) seem to be gaining attention in the stock market now. For the most part, this is likely a result of the latest regulatory filing from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A). Namely, Berkshire disclosed a purchase of an additional 794,000 shares of Occidental. This adds up to a $44 million transaction, bringing its total stake to about 16.4%. In total, Berkshire currently holds about 153.5 million shares of OXY stock, worth $9 billion.

All in all, Buffett’s focus on Occidental would likely draw attention to the energy firm’s shares. This is apparent as OXY stock is currently gaining by over 6% in the stock market now. According to Berkshire’s filings since March, the company’s average purchase price per share of OXY stock is $53. Following this investment, Berkshire would be bolstering its position as Occidental’s largest stakeholder. In second place on this front is investment firm Vanguard with an almost 11% stake. As a result of all this, it would not surprise me to see OXY stock making the rounds in the stock market now.

OXY stock
Source: TradingView

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The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Economics

Soaring Inflation And Crashing Rates Are Sparking Trucking’s “Great Purge”

Soaring Inflation And Crashing Rates Are Sparking Trucking’s "Great Purge"

By Craig Fuller, CEO at FreightWaves

The last trucking market…

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Soaring Inflation And Crashing Rates Are Sparking Trucking's "Great Purge"

By Craig Fuller, CEO at FreightWaves

The last trucking market crash was in 2019. The current market could end up worse for small truckload fleets.

The freight market crash in 2019 was caused by two factors – a freight slowdown due to tariffs on Chinese imports and a surge of new fleets flooding the market, even as rates continued to fall. 

Until 2019, we had never seen that many new fleets enter the market, especially during a market downturn. During 2019 an average of 7,200 fleets entered the market per month compared to an average of 5,200 fleets per month during 2008-18. 

The 2019 drop in freight volumes wasn’t significant. At their deepest trough, tender volumes registered a 4.6% drop in year-over-year load requests, and that lasted for just a few short months (May-July).

Trucking is a commodity and anyone that has been around commodity markets understands that it doesn’t necessarily take a dramatic move on one side of the market to change the balance of supply/demand and cause significant price swings. 

In 2019, the trucking market already had too much capacity relative to demand. The year-over-year decline was only in the mid-single digits. But, it was enough to push rates below carriers’ operating costs.

Removing the cost of diesel from the spot rate, here is what the market looked like in 2019 (van per mile): 

  • Low: $1.51

  • Average: $1.59

  • High $1.75

We are nearing 2019’s rock-bottom, inflation-adjusted spot rates

Trucking companies have much higher operating costs now than they did in 2019, even when removing fuel from the number. Every fleet’s operating cost will be different, but using data from TCA, ACT, and FreightWaves’ own analysis, we can draw some conclusions about the cost increases that a fleet would experience in 2022 compared to 2019. 

Assuming a fleet averages 6,500 miles per truck per month and purchased a four-year-old used truck in 2019 at $50,000, plus sales tax, financed for five years at 5% interest, the monthly payment would cost around $0.15/mile. With used truck prices surging during the pandemic, a four-year-old used truck last fall would run $77,000. If the vehicle was financed with similar terms, the per mile cost would be around $0.23/mile.   

A driver employee with experience working for a top-paying fleet can expect to make around $0.62/mile. In 2019, the same driver would have made around $0.47/mile. 

Higher variable operating costs include insurance (+$.02/mile), maintenance (+$.06/mile), equipment (+$.08/mile) and driver wages (+$.15/mile).

All in, variable costs have increased at least $0.31/mile more for fleet operators in 2022 compared to 2019. These numbers are likely understated, as they don’t include increases related to back-office operations and support staff, which can vary widely among fleets. 

Adjusting the 2019 numbers, the rates per mile total: 

  • $1.82 (low) 

  • $1.90 (average)

  • $2.16 (high)

The current spot rate (net fuel) is $1.95/mile. On a variable cost-adjusted basis, the trucking spot rates have matched 2019 since May 2022 – $2.16/mile, dropping $0.21/mile. It’s likely to get worse. The month of May typically has among the highest rates we’ll see all year, with July and August being some of the weakest months. 

It is conceivable that spot rates will drop below the inflation-adjusted 2019 low of $1.82 per mile in July, since there doesn’t seem to be any near-term market catalysts to drive additional demand. 

U.S.- bound container volumes, which have been driving a substantial amount of the freight surge in the U.S. trucking market since 2020, are seeing a significant drop, as reported by Henry Byers, FreightWaves’ senior global trade analyst.  

There are also the economic challenges that are apparent in the economy, including record-low consumer confidence, declining construction and industrial activity, surging inflation, and a Federal Reserve that is determined to slow the economy down to tame inflation, even if it means putting the economy into a recession. 

All of this means that the freight market will likely encounter additional headwinds and there are more reasons to believe that trucking spot rates have further to fall.

Capacity matters

Of course, trucking is a two-sided market. Demand is only one part of the equation; capacity also matters. 

Capacity is really just a function of how much dispatchable capacity is in the market. Like 2019, the trucking industry has seen a record number of new entrants enter the trucking market to take advantage of what were strong market conditions and record high spot rates created because of government stimulus over the past two years. The number of new entrants into the trucking industry nearly doubled the 2019 monthly record average. Since 2020, the monthly average of new fleets entering trucking has increased to 13,370 per month, up from 7,200. In April, the number hit 23,479. 

This large number of new entrants means that the trucking industry has many companies that are brand new, have higher cost structures (because they joined when the freight market was peaking) and that have never experienced a downturn. 

This massive surge of dispatchable capacity was built for a market that had much more freight activity. If the economy contracts further, it could spell disaster for many of the most vulnerable operators.

The summer doldrums

Even if the economy doesn’t contract, July and August are always slower than June. It is the time of the year when supply chains take a break and get ready for the retail surges that typically begin after Labor Day. 

The retail surge is a really important part of the freight calendar and often offers some of the highest spot rate opportunities. In the first half of the year construction, auto, beverages, and fresh produce drive the surges in trucking. 

In the second half of the year, surges are caused by retailers scrambling to get inventories placed for the holiday shopping season. That may not happen this year, with many retailers’ inventories overstocked. Since their warehouses and distribution centers are full, they are reluctant to add additional inventory to their supply chain and will focus their efforts on liquidating what they currently have in stock.

Trucking spot rates will not increase significantly until the Great Purge is over

As long as the market has excess capacity, freight rates will remain depressed. It will take a substantial purge of capacity before spot market carriers can expect relief. 

FreightWaves editorial director Rachel Premack covered this topic last week in her article titled “the Great Purge.”

The unfortunate reality of trucking is that the market is often “feast or famine” and with so many new mouths to feed, the famine this year could be much worse than was experienced in 2019. 

Tyler Durden Tue, 06/28/2022 - 10:20

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Economics

CED Releases Report on Using Census Bureau Data to Boost Child Care & Employment

CED Releases Report on Using Census Bureau Data to Boost Child Care & Employment
PR Newswire
NEW YORK, June 28, 2022

NEW YORK, June 28, 2022 /PRNewswire/ — Today, CED released the fourth and final installment of its unique 2022 series that ana…

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CED Releases Report on Using Census Bureau Data to Boost Child Care & Employment

PR Newswire

NEW YORK, June 28, 2022 /PRNewswire/ -- Today, CED released the fourth and final installment of its unique 2022 series that analyzes the role of paid child care in the economy—including its impact on labor force participation. The new report serves not only as a road map for researchers to build on CED's findings. The report is also useful to policymakers as they consider key questions related to the use of paid child care—especially for women—and its connection to the workforce and economic growth.

Specifically, the new report details how researchers can effectively leverage the underlying data from the Census Bureau's Current Population Survey (CPS), which CED used as the basis for its report series about paid child care. As detailed in the primer, the CPS is a monthly survey of US households jointly sponsored by the Census Bureau and the Bureau of Labor Statistics. As part of its Annual Social and Economic Supplement (ASEC), the survey includes questions about the use of paid child care since 2001 and about such expenditures since 2010.

"Our work uncovered several groundbreaking insights, including that boosting women's labor force participation by one percent—which more paid child care could help achieve—would generate nearly $73 billion of additional income for women," said Dr. Lori Esposito Murray, President of CED. "CED's series examines data more extensively and over a long a time period than any previous work. This fourth and latest report provides a foundation for the research community to discover additional insights, which will help inform public policies that generate more prosperity for the nation's families and the economy more broadly."

The report, The Economic Role of Paid Child Care in the U.S., Part 4: Child Care Data in the Current Population Survey, a Primer, covers five key aspects of the CPS data:

  • The design of the CPS and its Annual Social and Economic Supplement;
  • What specific data the survey captures;
  • The sources from which that data comes;
  • Best practices for using the data; and
  • Likely technical issues which come with the data and how to handle them

The series is the first deep analysis of paid child care usage mined from the CPS data. Findings highlighted from the first three installments in the series include:

  • A high price tag: In 2020, the average income of families using paid child care was $149,926.
  • COVID-19's impact on participation: From 2019 to 2020, children in paid child care dropped by nearly 20 percent.
  • The primary drivers of paid child care usage are labor force attachment, household income, and educational attainment.
  • Despite declining labor force attachment across all genders, men participate in the labor force at a higher rate than women.
  • Paid child care usage is directly impacted by maternal labor force participation trends.
  • A one percent increase in the labor force participation of women ages 18-54 would produce multiple economic benefits, including an additional income of approximately $73 billion.
  • Short-term changes in paid child care correspond with three key factors: labor force participation, actual hiring of mothers, and increased income.
  • Long-term changes in paid child care correspond with three different key factors: maternal labor force, real income, and the overall total of the male and female labor force.

The prior three reports as part of this series focus on 1) the link between paid child care and income; 2) the link between child care access and mothers' workforce participation; and 3) the economic benefits of increasing women's participation in the labor force. More information on the series, which was produced with funding from the W.K. Kellogg Foundation, can be found here.

About CED

The Committee for Economic Development (CED) is the public policy center of The Conference Board. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nation's interest. CED Trustees are chief executive officers and key executives of leading US companies who bring their unique experience to address today's pressing policy issues. Collectively they represent 30+ industries, over a trillion dollars in revenue, and over 4 million employees. www.ced.org 

About The Conference Board

The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

 

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SOURCE Committee for Economic Development of The Conference Board (CED)

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