A new study of New Mexico's universal child care program found two very different results. Low-income mothers worked much more after the program began. Higher-income mothers cut back on paid work. Arizona State University economist Chris M. Herbst reported the findings as IZA Discussion Paper No. 18968. Herbst said, "This is really a tale of two kinds of results."
For low-income mothers, the gains were large. Their labor force participation and their employment each rose 18 percent. Full-time employment grew 23 percent. Weekly hours worked rose 15 percent. "The introduction of universal childcare has just had a pretty profound impact on disadvantaged mothers' employment," Herbst said. He argued that the cost of care had been a major barrier, and that free care now lets these families afford to work.
Higher-income mothers moved the other way. Their labor force participation fell 8 percent. Their full-time work fell 17 percent. Their weekly hours fell 10 percent. Herbst gave two possible reasons. These mothers may have cut back to spend more time at home. Or they may have reduced work to go back to school. His paper frames the program as removing a real barrier for disadvantaged families while mainly serving as a financial benefit for better-off ones.
Herbst used monthly Current Population Survey data from the U.S. Census Bureau. The data ran from May 2019 to August 2026. He compared mothers in New Mexico before and after the policy. He also compared them to mothers in other states. New Mexico started the no-cost program in November 2025. It was the first state in the country to offer universal child care. To qualify, all parents in a home must work or do other activities, such as going to school.
Will the program pay for itself? Herbst noted that his increase for low-income mothers was larger than the 14.5 percent rise in labor force participation after Quebec started its highly subsidized child care program in the late 1990s. Research found that Quebec's program more than paid for itself after mothers worked more and paid more in taxes. Herbst said it is too early to tell whether New Mexico's policy will do the same, though he said, "It's looking promising." His study measures changes in employment, not the program's finances. So it does not show whether the added work and taxes cover its cost.