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A paper by Arizona State University researcher Chris Herbst reports that New Mexico’s universal child care program has been linked to sharply different work patterns by income. Lower-income mothers increased employment and hours, while higher-income mothers reduced work; the study does not yet establish why those changes occurred or whether the program will pay for itself.
A new study of New Mexico’s universal child care program finds that mothers’ work patterns shifted in opposite directions by income: lower-income mothers were more likely to work and increased their hours, while higher-income mothers reduced labor-force participation and full-time work. The findings, reported by Arizona State University professor Chris Herbst, offer an early look at how the state’s no-cost care policy may affect employment.
Herbst analyzed monthly U.S. Census Bureau data from May 2019 through August 2026, comparing mothers in New Mexico before and after the policy took effect with mothers outside the state. The source report describes the program as having begun the previous November. Herbst’s paper found that, among lower-income mothers, labor-force participation and employment each rose by 18% after implementation. Full-time employment increased by 23%, and weekly hours worked rose by 15%.
The results for higher-income mothers moved in the other direction. Their labor-force participation fell by 8%, full-time employment by 17%, and weekly work hours by 10%, according to the study. Herbst suggested some may have reduced work to spend more time with their children, while others may have returned to school. Those explanations are possibilities, not findings that the study has established.
The policy requires all parents in a household to work or take part in another qualifying activity, such as education, but does not set a minimum number of hours, the report said. That flexibility may allow part-time work or study. The study measures changes in work outcomes; it does not, by itself, show what individual families chose or why.
Work Gains Differ by Family Income
The findings point to different effects across income groups, rather than a single employment response to free child care. For lower-income mothers, the reported increases suggest that the cost of care may have kept some from taking available paid jobs. Herbst said the results indicate that affordable care had been a barrier to employment and that families could work once care became accessible without charge.
For higher-income mothers, less paid work could reflect expanded choices rather than a negative outcome, Herbst argued. Some parents may use the flexibility to study or spend more time at home. The research does not determine which explanation applies, nor does it measure the long-term consequences for household finances, careers or children. Those distinctions matter to policymakers evaluating whether the program is meeting families’ needs.
Herbst cautioned that it is too early to know whether the program will pay for itself through increased earnings and tax revenue. Research on Quebec’s universal, highly subsidized child care system found a 14.5% rise in mothers’ labor-force participation relative to its pre-policy level; the source report says that program later generated enough additional tax revenue to more than cover its cost. That international result cannot establish the fiscal outcome in New Mexico.
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New Mexico as a U.S. Test Case
New Mexico became the first U.S. state to enact a universal child care program, according to the source report. Herbst described the policy as an opportunity to study universal care in the American setting, where much earlier research focused on programs abroad, including Quebec and Norway.
The United States has had an earlier period of broad subsidized child care: centers supported through the Lanham Act during World War II helped women work while the country mobilized for the war. Herbst’s prior research on that program found that each additional dollar of spending was associated with a 0.1-percentage-point increase in women’s employment and 0.04 more hours at work. The report also says New Mexico did not participate in the Lanham Act program.
The current study adds evidence about mothers’ employment, but it is not yet a full accounting of the policy’s effects. The source report notes that earlier Lanham Act research found later benefits for children, including higher college graduation and earnings, but those outcomes take time to measure and cannot be assumed for New Mexico’s program.
“Disadvantaged families can now afford to work.”
— Chris Herbst, as quoted by The 74
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Reasons and Long-Term Effects Remain Open
The study reports changes in employment and hours, but the available account does not specify the underlying sample sizes, uncertainty ranges or detailed methods needed to assess the precision of each estimate. The comparisons described by the report show patterns associated with the policy; they do not establish why each mother changed her work or study arrangements.
It is also not yet clear whether the higher-income mothers’ reduced work reflects schooling, more time caring for children, or other factors. The program’s longer-term effects on family income, public finances and children’s development have not been established. Herbst said it remains too early to determine whether the New Mexico policy will generate enough additional tax revenue to cover its costs.
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Longer Follow-Up Will Test Outcomes
Researchers will need additional years of data to see whether the employment patterns persist and to examine possible effects on household earnings and public revenue. Assessing children’s development and later educational or employment outcomes will take longer still, the source report said. The next stage of evaluation will need to distinguish measured changes from explanations for those changes and track how families use the program’s flexibility.
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Key Questions
What did the study find for lower-income mothers?
Herbst’s study reported an 18% rise in both labor-force participation and employment, a 23% increase in full-time employment, and a 15% increase in weekly work hours after the policy took effect.
Did higher-income mothers work more?
No. The study reported an 8% decline in labor-force participation, a 17% decline in full-time employment and a 10% drop in weekly hours among higher-income mothers. It did not establish why those measures fell.
Why might some mothers have reduced their work?
Herbst suggested they may have spent more time with their children or returned to school. Those are possible explanations, not confirmed reasons identified by the study.
Does the study show that New Mexico’s program pays for itself?
No. Herbst said it is too early to tell. Research on Quebec’s program found it more than paid for itself, but that result does not prove New Mexico’s program will have the same fiscal effect.
Source: rss
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