- The US workforce changed dramatically over the last half century, with women entering paid work at near-equal rates to men but still carrying a disproportionate share of domestic responsibilities, leaving childcare and inflexible work as central barriers to equity.
- Entrepreneurship has become a key outlet for women seeking flexibility, but existing tax and childcare policies largely favor larger employers over small founders, worsening challenges for parents running startups.
- Historical precedent shows that federally funded childcare can expand workforce participation. Experts argue that updating such systems, addressing tax inequities and reframing caregiving as a shared societal issue — not just a women’s issue — would bolster both families and the economy.
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In 1942, the War Manpower Commission’s director in Mobile, Alabama, asked permission to hire women.
A million American men were deployed to the Second World War that year. Domestic manufacturing and other economic needs were transformed. In the 1930s, about 20% of American women were employed — just 5% of married women, though nearly all led household work. With a growing share of prime-age male workers overseas, American policymakers — practically all men— needed women to work.
Trouble was that many were mothers, and there were few alternatives for childcare. Early feminist Katherine Lenroot made a policy recommendation: Use federal wartime funds to subsidize child-care facilities. As recounted in researcher Jessica Calarco’s 2024 book, “Holding It Together: How Women Became America’s Safety Net,” it was a key moment to answer something crucial: To fight a world war, would Americans fund childcare?
The question isn’t purely historical. As of at least 2024, a third of all U.S. workers have kids under the age of 18. Almost two-thirds of American entrepreneurs were parents back in 2009, according to Kauffman Foundation research, a figure that is likely only to have grown since.
Founders are always trying to balance the age of the company and the age of the child.
Brian Brackeen
Over the last 50 years, the American workforce profoundly transformed. Women and men work at increasingly similar levels, but not under similar conditions. The distribution of male workers is clustered at both ends: Men still dominate the highest income brackets, and there’s a persistent group of prime-age men detached from the labor force. Meanwhile, women of all incomes still handle more domestic work than their male partners.
Nobel laureate economist Claudia Goldin has demonstrated that the primary driver of gender pay gaps is less about overt workplace discrimination and more about home-life realities smashing into so-called “greedy jobs”—men are more likely to take high-earning roles that demand long, inflexible hours.
After surging to record highs in 2024, prime-age women’s labor force participation edged down in 2025 — still elevated by historical standards but off the peak — raising familiar questions about the cost of care and inflexible work. As author Calarco memorably put it: “Other countries have social safety nets. The U.S. has women.”
This has unexpected outcomes for women’s entrepreneurship, which surged during the pandemic. Women founded roughly half of new businesses in 2023, up from 29% in 2019. Rather than spotting an economic opportunity, more did so to create the flexibility they couldn’t get in traditional workplaces. In new research, University of Wisconsin–Madison economist Tessa Conroy finds that entrepreneurship rates among women were higher in counties with longer mandated daycare closures.
“I firmly believe that you can have it all,” said Maria Underwood, an entrepreneur booster in Birmingham, Alabama, who just had her second child. “You just can’t have it all at the same time.”
Underwood was speaking on the latest episode of Builders Live, Technical.ly’s monthly podcast on national trends in ecosystem-building, while her newborn slept in a nearby room. Though she has an especially involved and attentive husband, she said, “I’m still the one who gets the calls from daycare.”
Equal parental leave regardless of gender or role rebalances the purpose of leave for establishing a household, as well as encouraging healthier kids and families, Underwood notes.
The flaws in tax policy for founder-parents
Nationwide, gender roles are being renegotiated, both at home and for work. Business founders are no different.
Victor Hwang, founder of Right to Start, told me that when driving cross-country to dozens of founder meetups, “The most ubiquitous question that came up was what about childcare for entrepreneurs.” He added that our tax system “is skewed in favor of larger established players,” noting the generous employer childcare credit for big companies even as solo founders can only claim a limited, nonrefundable dependent-care credit (and only if they have earned income).
Brian Brackeen, an investor-founder at Lightship Capital, framed the entrepreneur’s dilemma this way: “Founders are always trying to balance the age of the company and the age of the child.” Deciding a policy or a program based on gender is wrong from the start, because caregiving should range at the household level.
Whether you’re an investor evaluating a startup founder or an employer considering staff, Brackeen advises to consider: “What’s it going to be — leave or quit?”
Why this matters for local leaders
The solutions are present — and time-tested.
Back to the policy levers. We can actually copy from America’s own playbook.
We did this before. Back during the Second World War, the federal government funded child-care facilities in roughly 600–700 communities so mothers could enter factories and shipyards. (Some estimates count 3,000+ centers serving 600,000 children.) After the war, these so-called “Lanham Centers,” named after the congressman whose bill unexpectedly authorized the funding, were cut.
We can do this again — and modernize it. This summer, economist Kathryn Anne Edwards published “a comprehensive child development system for America” to cover the three time-delineated gaps all working parents confront: pre-K care, after-school hours and the summertime. That’s not a handout; it’s growth policy. One recent estimate pegs inadequate childcare’s annual hit to the US economy at $122 billion in lost productivity, earnings and tax revenue.
We can fix the tax bias. Big employers can claim up to $150,000 per year via the federal employer-provided childcare credit. Solo founders and very small firms mostly can’t, and parents only get a limited child- and dependent-care credit that’s contingent on earned income and not designed for pre-profit startups. If governors and Congress want more new companies, they can level this playing field, Hwang argues.
We can incubate providers like we incubate startups. Wichita, Kansas, is experimenting with exactly that — regular city-run orientations and a community accelerator for childcare entrepreneurs — because growing access to childcare grows the workforce, just like it did in the 1940s.
Political scientist Anne Marie Slaughter has argued that change will be slow if the “care problem” is described as a “women’s problem.” Better to view it for what it is: a society-wide crisis, and a drag on the economy and families.
The first step is men doing more at home, and progress has been made. A 2023 paper showed that the pandemic narrowed the gap of time spent on household chores between men and women.
But it didn’t close entirely.
Worse, when a world war drove American action to addressing one element of gender imbalances, the gains were reversed soon after. Let us not do it again.
