If child care in New England were more available and affordable, significantly more mothers with young children would be able to join the workforce, according to a new report from the Federal Reserve Bank of Boston released June 23, 2026. The study, written by Boston Fed principal economist Bo Zhao and economist María José Luengo-Prado, finds that a 0.23 increase in child-care slots per child is associated with a 0.42 percentage point jump in labor force participation among mothers with children younger than 6. The report also reveals that home-based child care plays a particularly crucial role in non-urban and low-income areas, while center-based care matters more in urban neighborhoods.
Across the five New England states examined—Connecticut, Maine, Massachusetts, Rhode Island, and Vermont—the average child care cost during the study period from 2010 through 2023 was $2,136 per month, with Massachusetts posting the highest costs and Maine the lowest. The region's overall child-care supply averaged approximately 0.57 licensed slots per child younger than 6, ranging from 0.49 in Rhode Island to 0.86 in Vermont. While total supply declined only slightly over the 13-year period, home-based supply fell sharply in all five states, dropping from roughly 40% of capacity to just 25% as center-based care expanded. Child-care costs spiked after the COVID-19 pandemic, and the report shows that a $563 monthly decrease in costs is associated with a 1.9 percentage point increase in labor force participation for mothers with young children.
"Most previous research relies on state-level or county-level measures of childcare supply and cost, overlooking the vast differences within states and counties," the authors write. The report finds that an increase in home-based supply of about 0.09 slots per child is associated with a 0.63 percentage point increase in labor force participation and a 0.66 percentage point increase in employment for mothers with young children. According to Zhao and Luengo-Prado, "Taken together, our findings underscore that childcare is not only a family concern but also a macroeconomic one. Increasing childcare availability and affordability can directly improve women's participation in the labor force, alleviate workforce shortages, and strengthen household incomes and government budgets."
The report explains that home-based care's decline likely reflects the region's aging child-care providers, regulatory complexity, and rising real estate costs. As home-based options disappeared, center-based care expanded to account for approximately 75% of total capacity, pushing toward more structured settings that typically carry higher prices. The authors note that high costs hit urban and high-income families harder than their rural and low-income counterparts, possibly because many low-income families depend on state subsidies, informal care arrangements, or part-time options. "By contrast, high-income families generally pay the full market price for childcare, so price increases affect them more directly," the authors write, adding that these families also tend to need formal full-time care because of their job demands.
The authors say policymakers could consider offering additional support specifically to home-based providers, given their "central yet declining role" in the region's child-care ecosystem. In non-urban and low-income areas, home-based care drives the positive effects of additional local supply, whereas center-based care plays a limited role in those communities. The report documents that areas where availability—not cost—limits access to child care tend to be in rural parts of each state, while urban communities face both low supply and high costs. The bottom line: accessible child care isn't just a convenience for families—it's an economic lever that could bring thousands more women into New England's workforce and ease the region's labor shortages.