The US has lagged behind other advanced economies in providing child care options, and improvements could help more women return to the job market, Federal Reserve Chair Jerome Powell said Wednesday.
"I do think that's an area that's worth looking at," Powell told lawmakers when asked if helping families find affordable child care could help the economy get back to full employment more quickly.
Other advanced economies have built up child care and as a result "they wind up having substantially higher labor force participation among women," Powell told the House Financial Services Committee.
"We used to lead the world in female labor force participation, a quarter century ago, and we no longer do, and it may just be that those policies have put us behind."
The unemployment rate for women over 20 was 6.0 percent in January, below the national rate but close to double what it was a year earlier, according to official data.
However, 2.4 million women left the workforce altogether during the pandemic -- about a million more than men -- dropping the labor force participation rate to 57 percent.
Powell attributed that to child care duties falling more heavily on women at a time when many schools are closed.
The central banker's response was remarkable in that in two days of testimony Tuesday and Wednesday he steadfastly dodged any attempt by legislators to extract a comment on what policies the federal government should pursue.
As Congress moves towards approving President Joe Biden's $1.9 trillion aid package -- which provides direct funding and tax credits for child care -- Powell said "those are decisions that lie in your hands."
"But I do think it's worth looking at these as the United States falls behind in labor force participation, we need to be asking why that is the case and what are the ways we can do more."