Immigration Reform Will Upend the Childcare Industry

An immigrant population makes childcare more affordable and also makes parents more likely to have kids. Stricter policies would change everything.

by Julian Smith
Originally Published: 
A woman drawing with children

Economist Lucas Kohler is happy to be raising two young kids in Washington DC. Sure, politicians call it a swamp, but the city of roughly 700,000 has a surfeit of cultural and outdoor offerings. For Kohler and his wife—both of them work full time, him at the International Monetary Fund, her at the Inter-American Development Bank—taking advantage of of local sites is impossible without help. The person who provides that help is a live-in nanny named Maria, who cares for the children and makes sure it’s possible for them to spend quality time with their parents even if the if they get held up at the office by cooking and cleaning up.

It is clear talking to Kohler that Maria was hired to do a job and subsequently, probably predictably, became an institution of a sort, providing support for both kids and parents. He knows that employing Maria is a privilege, but he wants to make the arrangement work for her as well. “Maria loves our kids and sends remittances home,” Kohler adds. ” It’s a virtuous circle. I can’t imagine doing it any other way.”

Childcare in the U.S. isn’t cheap; compared to the 34 other countries in the Organisation for Economic Co-operation and Development, working American parents like the Kohlers pay nearly twice as much of the average North American or European parent by percentage of net income. This often forces parents to decide between working and having children. The costs deflate employment numbers and now may go up as laborers leave the country. The Trump administration’s crackdown on illegal immigration and legal refugees will make a difficult balancing act even harder for a high number of well-to-do parents while separating caretakers from children they love and jobs they need.

The administration’s push toward “immigration reform” is already resulting in fewer foreigners coming into the country. But amid the debate over morality and constitutionality, the effect this change could have on American families is often overlooked. “People don’t understand the extent to which immigrant women are so important in our childcare workforce,” says Maki Park of the Migration Policy Institute’s National Center on Immigrant Integration Policy. “The work of taking care of people is completely undervalued in America.”

Americans have blamed immigrants for stealing jobs, lowering wages, and committing crimes since at least the 19th century when job ads carried the caveat “No Irish need apply.” In a 2016 poll by CBS News, 25 percent of people said that illegal immigrants take jobs away from American citizens. President Trump has called repeatedly for stronger restrictions on illegal immigrants who, he says, “compete directly against vulnerable American workers.”

But the data shows that immigrants benefit the country in myriad ways. A 2016 report by the National Academies of Sciences, Engineering, and Medicine found “little to no negative effects on overall wages and employment of native-born workers in the longer term,” in the words of project leader Francine Blau of Cornell University. Studies conducted across 200 metropolitan areas and 20 years of data, by researchers at the University at Buffalo, the University of Alabama, the University of California, Irvine, and the College of William and Mary, show that immigrants commit fewer crimes than native-born Americans, on average, and that cities with larger immigrant populations have lower rates of crime and violence.

According to the American Immigration Council (AIC), immigrants made up 16.9 percent of the country’s labor force in 2015, with childcare the eighth most popular job for foreign-born workers. The industry particularly attracts low-skilled immigrants — usually defined by academics as having a high school degree at most — because it is notoriously under-regulated and language skills aren’t considered critical. (In fact, speaking a second language is often considered a benefit.)

Recent academic research suggests that restricting immigration can have a ripple effect that extends to how much mothers work and how many children they decide to have. In 2015, Delia Furtado, an economics professor at the University of Connecticut, investigated whether the presence of low-skilled immigrants affected the price of childcare and couples’ fertility. The answer? “I found yes on both,” she says.

The link between immigration and the price of childcare has shown up in earlier studies, including a 2008 study by Patricia Cortés at the University of Chicago. Cortés analyzed data from the consumer price index from different cities between 1980 and 2000 and found that a wave of low-skilled immigration to the U.S. over that period led to lower prices for food, housekeeping services, and childcare in large metropolitan areas. Specifically, for every ten percent rise in low-skilled immigrants among the labor force, prices for these “immigrant-intensive services” fell by two percent.

In 2015, Delia Furtado, an economics professor at the University of Connecticut, investigated whether the presence of low-skilled immigrants affected the price of childcare and couples’ fertility. The answer? “I found yes on both,” she says.

Furtado’s 2015 study went further, to the decision to have children itself. To tease out the connection between immigration and fertility, Furtado crunched numbers from the U.S. census from 1980, 1990, and 2000. After controlling for factors such as race, income, age, education, and marital status, the results were clear: more immigration meant natives (i.e. non-immigrants) had more kids. As more low-skilled immigrants moved into a community, native white (defined as non-Hispanic) women between 22 and 42 were likely to work longer hours and also to have more children.

The fertility effect was most pronounced on women who were married, over 35, and had a college degree, especially an advanced degree. “Higher-skilled women are less likely to live near family members and to have higher opportunity costs of leaving the labor force,” Furtado says, and are most likely to use paid childcare. (Her study didn’t distinguish between nannies and formal childcare centers.) Older, married women may be more likely to plan a pregnancy deliberately based on factors such as declining fertility and childcare costs, she adds.

Unsurprisingly, the baby boost only happened when the immigrants came from countries whose residents often end up working in childcare, such as Paraguay, Brazil, Colombia, Spain, Cameroon and Indonesia. “You tend to get jobs in occupations where lots of people you know work already,” Furtado says. In contrast, there wasn’t any change when the immigrants came from places like Albania, Tunisia, and Bulgaria.

While her study focused on data from mothers, Furtado says she assumes the results would apply to fathers as well. (“An increase in fertility for women necessarily implies that more babies are born to men as well,” she says dryly.)

“I was surprised by the magnitude of the effects,” Furtado says. “There’s a lot of evidence suggesting that, especially at the high end of wage distribution, women in places with lots of immigrants tend to work really, really long hours. Given this, you’d think they should be having fewer children. So I was surprised to find that sure, some respond by working long hours—but others seem to have more children.” And anything that affects how many children American have is all the more significant because fertility rates in the U.S. recently fell to their lowest point since records began in 1908, according to the CDC.

It is possible, Furtado says, that in some places college-educated women have more children for reasons that don’t involve access to cheaper childcare. “It could be that there’s something about these cities that both attracts low-skilled immigrants and gets high-skilled women to have more children,” like an industrial city that offers both jobs for low-skilled immigrants and managerial positions for potential fathers, who can help pay for childcare. But overall, she says, “my evidence suggests that it is in fact causal.”

As more low-skilled immigrants moved into a community, native white (defined as non-Hispanic) women between 22 and 42 were likely to work longer hours and also to have more children.

Furtado’s study is part of a growing body of academic work on how immigration benefits American families. In a landmark 2014 study, Catalina Amuedo-Dorantes of San Diego State University and Almudena Sevilla of Queen Mary University of London looked at a topic the Kohlers experienced firsthand: how immigrant childcare frees parents up to spend more quality time with their children.

Amuedo-Dorantes and Sevilla used several decades of surveys filled out by mothers in the U.S. who recorded how they spent their time day to day and hour to hour. When low-skilled immigration increased, native mothers reported spent about half an hour less on routine housework and basic parental work like bathing, feeding, and changing diapers. At the same time, these moms spent just as much time on fun and educational activities with their children, such as reading in English or playing with other moms and their kids. In other words, quantity went down but quality went up, as a percentage of overall time.

Similar to Furtado’s study, the change only occurred among college-education mothers; in this case, ones with kids five years old or younger. The results, Sevilla says, suggest that “mothers do not outsource childcare that seems to be best for kids, such as educational and recreational [activities].”

Immigrants also can offer something intangible beyond language skills and credentials. Call it life experience, says Brenda Fisher, a working mother in DC. She entrusts her children, age nine months and three years, to a nanny from Laos who arrived in the U.S. as a refugee. The woman doesn’t have a bachelor’s degree, but she is extremely reliable, says Fisher, who herself is a child of immigrants from East Asia. “She has experienced so much. I would trust her in any emergency. There’s no way that could be replaced by a 24-year-old with a master’s degree.”

Letting in more low-skilled immigrants boosts opportunity for them and working mothers at the same time. “It’s a win-win for everybody—except the current government-protected, highly regulated, heavily licensed, and very expensive daycare industry.”

From a policy perspective, the immigration-fertility link is “a no-brainer,” says Alex Nowrasteh, an immigration policy analyst at the Cato Institute’s Center for Global Liberty and Prosperity. “This is a way decreasing immigration destroys jobs, by unintentionally forcing more skilled women out of the workforce.” Letting in more low-skilled immigrants boosts opportunity for them and working mothers at the same time. “It’s a win-win for everybody—except the current government-protected, highly regulated, heavily licensed, and very expensive daycare industry.”

What surprises Noweasteh is how little coverage the issue receives. “In this political environment, it’s skilled educated elites who are apparently the bad guys, so anything that would help them is not high on the policy list. Everyone is just concerned about blue-collar male workers.”

Immigrants often work in childcare to support their own families and children, juggling time between the two, says Furtado. She should know—her mother was an immigrant nanny from the Azores, part of Portugal. “One day when I was young, she came home and announced that the family whose kids she was taking care of was going to have a third child,” she says. “I thought, wow, a college-educated woman having three kids, how does she do it? Then I thought—because of my mom.”

Liberalizing immigration rules could help professional women break through the glass ceiling, Furtado says, so logically they would be the ones to resist calls to tighten restrictions. Fathers finishing up paternity leave could go back to work with less stress as well — while letting everyone spend more quality time together on mornings, evenings and weekends. In the meantime, says Kohler, making it harder for immigrants to enter the country will only keep the status quo, and that’s not working. “A lot of the time parents have to choose between kids and work,” he says. “In this day and age, that seems asinine.”

The heated debate over immigration and ongoing crackdown at the borders are already having an effect in the world of immigrant daycare providers, says Norma Ortega, who runs a licensed Spanish immersion daycare in Beaverton, Oregon. Most of her charges, aged one through five, are non-native speakers.

Ortega came from Guadalupe, Mexico in 1990, and goes home to visit during the summer. But not all immigrants have that option, she says, especially if the borders keep tightening. “It affects them emotionally,” she says. “It will not feel like this is the country with the freedom that we love. And this will affect the economy of parents in the families.”

“It is scary,” she says. “A lot of people in Mexico are looking for options in Canada because of the situation with Trump. They’ve always opened the doors to Mexicans. They help refugees.” People she knows are already choosing to vacation in places like Europe instead of the U.S.; by one estimate this shift will cost the U.S. an estimated $1.1 billion in 2017.

“Kids are afraid,” Ortega says. “They ask me, ‘What did I do? Do I have papers?’

At the same time, Ortega feels like the spotlight on immigration has made the parents who entrust her to watch and educate their children aware in a new way. “They appreciate me like a person, not just a business. Even if their kids have grown up, they still come in and say, ‘Norma, we are with you. We love you.”

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