The Build Back Better Act would expand federal subsidies for child care and provide universal preschool at no cost for eligible children. Those policies would affect child care workers (including teachers) and families with children.
H.R. 5376, the Build Back Better Act, as passed by the House of Representatives, would expand federal subsidies for child care and provide universal preschool at no cost for eligible children. Those provisions would increase federal deficits by $381.5 billion from 2022 to 2031, the Congressional Budget Office estimates.
In addition to the effects on the federal budget, those provisions would affect child care workers (including preschool teachers) and families with children. This document describes the key channels through which those changes could affect the economy—answering some questions asked by Members of Congress. Understanding those channels would be important for identifying any potential effects on the agency’s economic forecast if those provisions were enacted. The document also describes channels through which short-term spending on child care and preschool could affect the labor market in the longer run and how those policies would interact with existing tax subsidies for child care.
If subsidies were expanded and preschool was universally provided, child care providers and preschools would hire more workers, boosting wages. Some parents would work more and some would work less, depending on the ages of their children, their income, their employment status, and their child care choices under current law. On average, parents’ employment would probably increase slightly under both programs.
This document does not examine effects that would arise from how the programs were financed.