The Great Exit: Return-to-office demands and skyrocketing childcare push young mothers out of the workforce, KPMG research finds

Labor force participation among mothers with children under five dropped nearly three percentage points between January and June 2025, coinciding with a near doubling of full‑time office mandates among Fortune 500 companies. This aligns with KPMG’s finding that mothers—especially college‑educated mothers of very young children—are being pushed out by inflexible schedules atop a constrained childcare market.

As KPMG puts it, simply: “Since late 2023, women with young children have been leaving the labor force.”

What the report says

• Childcare labor shortages have collided with elevated demand, keeping prices high and options scarce; as a result, mothers are exiting or reducing hours more than fathers, with the steepest declines among college‑educated mothers of very young children since 2023 highs.
• Childcare employment flatlined after federal stabilization funds ended in 2023, leaving the sector roughly 100,000 workers below where it would be had support continued, which contributes to higher prices and waitlists that destabilize work for parents.
  • KPMG says the so-called “childcare cliff” has become “more of a plateau. But that plateau shows a sector in crisis.”
• Return‑to‑office policies amplify these pressures: when care arrangements can’t flex to added commute time or in‑office days, one parent—disproportionately the mother—cuts hours or leaves the labor force entirely, eroding household income and firms’ retention of experienced talent.

Key numbers

• Labor force participation for college‑educated mothers with very young children fell to about 77% in August 2025 from near 80% in 2023, while fathers in comparable groups edged up, widening gender gaps in work attachment among parents of young kids.
• Childcare prices have increased at roughly twice the pace of overall inflation, reflecting supply constraints and higher operating costs that providers pass on to families, which in turn raises exit pressure for mothers.
  • “The childcare crisis is not new,” KPMG writes, “but it has increased in intensity. Once parents returned to work and sought more childcare services, prices started to surge again.”
• One striking conclusion: Women with a bachelors or higher and young children have represented the largest decline in labor force participation since 2023.
  

Why it matters

• Household impact: Reduced maternal labor force participation lowers earnings and career progression, with long‑run effects on wealth accumulation and gender wage gaps, while forcing difficult trade‑offs in family budgeting under rising care costs.
• Macro impact: Employers lose productive, experienced workers; hiring and training costs rise; and aggregate growth slows as labor supply retreats in segments critical to productivity and leadership pipelines.
• Policy risk: The report’s trends are unfolding alongside a weaker jobs market and policy shifts that disproportionately affect women-heavy sectors, which can compound the exit dynamics if childcare access and affordability do not improve.

Broader context

• Return‑to‑office mandates: Fortune reports that full‑time in‑office requirements among Fortune 500 firms rose to about 24% in 2Q25 from 13% at end‑2024, eroding the flexibility that had kept many mothers attached to work during and after the pandemic; as mandates tightened, participation for mothers of young kids fell from roughly 69.7% to 66.9% by mid‑2025, echoing KPMG’s documented declines among college‑educated mothers of very young children into 2025.
• The push‑pull mechanism: loss of flexibility collides with soaring childcare costs and limited availability, forcing mothers into hours cuts or exits.

What to watch for next

• Immigration and workforce supply: With about one in five childcare workers being immigrants nationally, tighter immigration policies could further constrain staffing, exacerbating shortages and price pressures in high‑cost states.
• Employer responses: Expanded flexibility, backup care, and on‑site options can reduce parental disruptions; absent such supports, stricter in‑office mandates tend to trigger disproportionate maternal exits or hours cuts.
• Policy experimentation: State actions (funding expansions, tax credits, wage supports) and federal choices on childcare, labor, and immigration will shape whether the current plateau shifts toward recovery or deepens into a prolonged capacity gap.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.