Ed Policy Seminar Series: The Effect of the Minimum Wage on Childcare Establishments
INTRODUCTION
Childcare is essential for working families but is often unaffordable for parents and offers poverty-level wages to workers. This study is the first to examine how minimum wage policies affect the childcare industry, a labor-intensive, highly regulated sector with limited scope for capital-labor substitution. Using state-level minimum wage increases from 1995–2019 and a cross-state county border design, I estimate impacts on childcare establishment stocks, flows, and composition. I find that while overall establishment numbers and employment remained stable, turnover increased, driven by reallocation toward larger waged-sector providers. Minimum wage hikes also reduced the share of self-employed providers with advanced degrees, suggesting implications for both access and quality of care.
Get to know the speaker!
Katharine Sadowski received her PhD in Public Policy, with concentrations in economics and data science, from Cornell University in 2025. She is an applied microeconomist whose research spans labor and public economics, the economics of education, and policy analysis, with a particular focus on early childhood education. She employs a variety of methodological tools including econometrics, natural language processing, and machine learning. Sadowski’s currently working on a series of projects using restricted-access Census data to examine how local, state, and federal policies affect the childcare industry and, in turn, shape the experiences and outcomes of families and children. Her work has been funded by the W.E. Upjohn Institute, Russell Sage Foundation, and Horowitz Foundation.