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The Cost of Childcare Is ‘a Crisis,’ and It’s Set to Get Worse in September

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• It costs an average of over $10,000 a year for childcare in the US, causing many women to leave the workforce.
• Many states have childcare resources, but the quality of those resources varies significantly.
• The American Rescue Plan included childcare assistance, but that’s set to end in September.

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When Toi Smith’s four boys were younger, she worked in corporate HR. Smith was a single mom and wasn’t receiving child support from her kids’ dads, so she qualified for food assistance and welfare. But even with her salary and subsidies, Smith couldn’t afford childcare.

Smith eventually found a somewhat affordable in-home daycare on Craigslist that cost $1,300 a month. That was the same amount as her rent.

“It’s a vicious cycle,” Smith says. “You have to go to work. In order to go to work, you have to put your kids in daycare.”

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The cost of childcare is ‘a crisis’

Smith isn’t alone in finding it almost impossible to pay for childcare. Childcare prices often rival rent prices, averaging $10,853 a year, according to a 2022 report from childcare advocacy organization Child Care Aware of America.

The US Census Bureau reported that the median American household income is $70,784. If that average household has just one child, the $10,853 annual childcare costs eat up 15% of the family’s income.

“Nobody can afford this. It’s not you,” Child Care Aware of America interim CEO Michelle McCready says. “It’s everywhere. It’s a crisis. It affects every income bracket.”

Jess Carson discovered that many families use credit cards, go into debt, and send their kids to unlicensed daycare providers because they can’t afford formal childcare. She learned this during her research for the 2022 Preschool Development Grant’s New Hampshire Family Needs Assessment Survey.

“It’s a series of trade-offs for families,” says Carson, who is also the director of the Center for Social Policy in Practice at the University of New Hampshire’s Carsey School of Public Policy.

States can sometimes help parents pay for childcare

Individual states determine much of the childcare assistance available. But each state’s subsidies differ dramatically.

Child Care Aware of America offers parents a database to find local organizations offering childcare resources. These organizations can inform parents about subsidies and scholarships available in their area and for their income.

Carson’s research illustrates how childcare differs from state to state by comparing subsidies available in Vermont and New Hampshire. Vermont offers higher income eligibility and larger amounts for childcare subsidies than New Hampshire. Because of this, Vermont families can save up to $20,000 more on childcare costs than New Hampshire families.

“These differences emerge in what a family could pay out of pocket, just living five miles apart on either side of the border,” Carson says.

Though Carson and McCready are happy to see the states making childcare more affordable, they both mention the need for the federal government to make it a priority. During the pandemic, the Biden administration offered childcare assistance for both parents and childcare providers, but this money is set to run out in September. If this happens, McCready says it could lead to an even worse childcare crisis.

Our mindset around childcare needs to change

Carson, McCready, and Smith all say that a mindset shift is required in the country’s attitude toward care. They all want to see citizens and politicians recognize that childcare is a public good.

“This is not a nice-to-have,” McCready says. “It’s essential for a strong, thriving workforce.”

According to economist James Heckman, the US receives a 7% to 10% return on investment when it invests in early childhood education. When parents can’t afford childcare, the country loses out on these huge gains.

Lack of childcare also leads to many women leaving the workforce. “Black single motherhood is the thing that politicized and radicalized me,” says Smith, who writes about her experiences on her website. “My motherhood is deeply woven into how I think and how I work because it’s all care work. There’s no way that I can separate it.”

Smith wants more people to be open about their struggles around parenthood, money, and work. She wants parents to feel comfortable openly saying that they’re overwhelmed and can’t afford childcare. She also wants friends, neighbors, and relatives to offer to help with kids when they can. She believes that this openness and cooperation could help offset some of the burden of paying for childcare.

“We think we have individual problems when actually there are societal problems,” Smith says. She says it’s important to identify others dealing with the same problems and ask how you can support each other. “What we start to do is crack at these systems a little bit.”

Sabina Wex

Sabina Wex is a writer in Toronto. She has written for CBC, Next City, Hey Alma and more. 

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Child Care Cost Burden* | County Health Rankings & Roadmaps

Data Source

The Living Wage Calculator; Small Area Income and Poverty Estimates

The Living Wage calculator estimates the cost of living in your community or region based on typical expenses. The tool helps individuals, communities, and employers determine a local wage rate that allows residents to meet minimum standards of living.

The US Census Bureau, with support from other federal agencies, created the Small Area Income and Poverty Estimates (SAIPE) program to provide more current estimates of selected income and poverty statistics than those from the most recent decennial census. The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions. These estimates combine data from administrative records, intercensal population estimates, and the decennial census, along with direct estimates from the American Community Survey, to provide consistent and reliable single-year estimates. These model-based single-year estimates are more reflective of current conditions than multi-year survey estimates. At the county level, SAIPE provides estimates on children ages 5-17 in families in poverty, children under age 18 in poverty, all people in poverty, and median household income.  Estimates are created for school districts, counties, and states.

Website to download data
For more detailed methodological information

Key Measure Methods

Child Care Cost Burden is a percentage

Child Care Cost Burden is the cost of child care for a household with two children as a percent of median household income.

Child Care Cost Burden cannot be compared across state lines

Childcare cost data are based on market-rate surveys reported separately by state, published in different years. Some states only report state- or region-level estimates, and thus require county-level imputation. Due to this, states may differ in the extent to which estimates are modeled vs. observed.

Measure limitations

Child care costs as a percentage of median income in a county is not fully representative of the cost burden of child care in a county, as half of the households have a lower income and thus child care would constitute an even higher percentage of their income. Similarly, this measure is not representative of the cost of child care for families with more than two children, or with infant children.  

Finally, the quality of child care is most important in terms of positive impacts on children’s development, and the measure of Child Care Cost Burden does not reflect the quality of available care. 

Numerator

Child care cost data provided by the Living Wage Calculator.

Denominator

Median household income data calculated from the Small Area Income and Poverty Estimates.

Can This Measure Be Used to Track Progress

The estimate of child care costs have been adjusted to reflect inflation and should not be compared to past years.

Finding More Data

Disaggregation means breaking data down into smaller, meaningful subgroups. Disaggregated data are often broken down by characteristics of people or where they live. Disaggregated data can reveal inequalities that are otherwise hidden. These data can be disaggregated by:

• Age
• Race
• Subcounty Area

The Living Wage Calculator is the source for the household expenses used in the Child Care Cost Burden measure. Child care expenses by county are available at https://livingwage.mit.edu/.

Child Care Aware of America (CCAoA) https://www.childcareaware.org/our-issues/research/ccdc/: offers summary data for most US states and the Child Care Data Center (CCDC) provides state and county-level data about child care affordability, accessibility, and environmental risk within six pilot states (Illinois, Minnesota, Missouri, Oregon, Washington, and Wisconsin).

The Economic Policy Institute (EPI) https://www.epi.org/child-care-costs-in-the-united-states/: offers an interactive tool to examine the costs of child care in each state, and the cost of child care as a percentage of multiple income levels.

The Diversity Data Kids – Child Opportunity Index includes a summary measure of early childhood education alongside other components of place-based opportunity for children.

The County Health Rankings measure of Child Care Centers provides added context for understanding child care opportunities in your community.

References

¹ Magnuson, Katherine, and Jane Waldfogel. “Delivering High-Quality Early Childhood Education and Care to Low-Income Children: How Well Is the U.S. Doing?” In An Equal Start?: Providing Quality Early Education and Care for Disadvantaged Children, edited by Jane Waldfogel, Ludovica Gambaro, and Kitty Stewart, 1st ed., 193–218. Bristol University Press, 2014. https://doi.org/10.2307/j.ctt9qgznh.14. 

² Lyonette, C., Kaufman, G., and Crompton, R. “‘We Both Need to Work’: Maternal Employment, Childcare and Health Care in Britain and the USA.” Work, Employment and Society 25, no. 1 (March 1, 2011): 34–50. https://doi.org/10.1177/0950017010389243. 

³ Gould, E. and Cooke, T. 2015. High quality child care is out of reach for working families. Economic Policy Institute. Issue Brief #404. https://www.epi.org/publication/child-care-affordability/ 

⁴ Child Care and Development Fund (CCDF) Program, A Proposed Rule by the Health and Human Services Department on 12/24/2015.