Children of color fare even worse, with around 1 in 3 African American and Hispanic children living in poverty. The benefits of high-quality, licensed child care also extend to parents and the wider society.
In addition to the immediate impact of affordable, high-quality child care, researchers find that access to this care produces significant societal savings for decades into the future.
Participants are more likely to have improved health outcomes, increased future earnings, and reduced crime rates, meaning each dollar spent on early childhood programs is paid back several times over.
It is no secret that child care can be costly, and this is especially true for infant and toddler child care. For example, in addition to tuition fees, providers may be relying on in-kind donations, reduced or free rent, or extensive fundraising to cover their costs. With nearly , licensed child care providers in the United States, operating costs vary widely, making estimating the cost of child care an imprecise science. In developing a model, it is necessary to make several assumptions about the hypothetical program.
These can be informed by data but also rely on the professional judgment of experts with experience in this field. To help illustrate the gap between current child care prices and the real cost to provide high-quality child care, the Center for American Progress developed a state cost model for center-based programs. Table 1 details the key assumptions included in this model. Figure 1 illustrates the difference in cost per child based on age, with preschool cost data included as a comparison.
Teacher and nonteacher staff salaries and benefits are the No. As shown in Figure 2, in classrooms serving the youngest children, salaries and benefits take up a larger share of expenses due to smaller class sizes and lower adult-child ratios. However, even this high monthly cost leaves child care centers struggling to cover their costs. In a family child care program, the problem is similar.
In small, home-based programs, the entire family child care program can be viewed as one classroom. Looking at the data in this way, it becomes apparent that the system is broken: Parents are stretched thin, teachers are underpaid, and programs are struggling to stay solvent. While the costs above represent a program meeting minimum state licensing standards, many providers offer lower teacher-student ratios or group sizes than required by licensing—especially in states where ratios are particularly high and do not align with developmentally appropriate best practice.
Higher wages are critical to retain experienced and skilled early childhood educators who can foster positive interaction with young children and provide a structured learning environment. To better understand the cost of a high-quality infant and toddler child care program, the authors created a high-quality child care center and family child care home model in which salaries and benefits are aligned with kindergarten teacher compensation and in which ratios and group sizes are aligned with age-appropriate best practice, as defined by the National Association for the Education of Young Children.
Paying higher salaries also increases the cost gap between child care for infants and preschoolers. The increased salaries in the high-quality care model drives the higher cost, with compensation accounting for between 68 and 76 percent of total expenses in this model, as shown in Figure 4. In addition to teacher-student ratios and teacher wages, program size and the ages of children enrolled also affect the finances of a child care program.
Like any business, child care providers benefit from economies of scale. In a larger program, more revenue from tuition covers fixed costs—such as licensing fees, utilities, and program administrators—that do not vary based on the number of children enrolled.
However, with almost two-thirds of child care centers serving less than 75 children, many are left struggling to break even. Serving infants and toddlers alongside preschoolers is also key to financial solvency. To offset the high cost of infant care, providers can use revenues from older children to subsidize the costs associated with infant care.
For safety reasons, when infants are enrolled in family child care homes, most states limit the total number of children for which providers can care.
For example, a provider may be licensed to serve up to eight children; but if they enroll just one infant, they might only be able to serve five additional children. As an increasing number of states and cities make needed investments in preschool, 33 they should consider the impact that these initiatives can have on access to infant and toddler child care. If initiatives only support access to preschool in public school programs, community-based child care providers will struggle to stay afloat due to the loss of revenue from preschool enrollment.
Policymakers can mitigate this impact by designing initiatives that include community-based programs. For example, West Virginia requires at least 50 percent of classrooms funded by its universal preschool program to be offered in collaboration with community partners. Shared services alliances or staffed family child care networks represent an emerging strategy to support small providers and family child care homes.
These alliances or networks can support program operations, helping to increase program efficiency and centralize administrative services, such as fee collection and subsidy administration, thus freeing up program directors to focus on pedagogical support.
The network hub is funded either by member fees or by philanthropic or other outside support. As part of an alliance, providers can also increase their purchasing power, buy supplies in bulk, enter into collaborative contracts for support services such as maintenance, and share administrative staff to reduce nonteacher personnel costs.
In this way, shared services alliances can help providers maximize revenue and reduce costs, as well as help teachers and directors focus on their core mission of educating children. Limited public funding forces families to shoulder the majority of the burden of paying for child care. While the U. The true cost of quality infant and toddler child care is unaffordable for most families.
Table 5 shows how much parents would need to spend, on average, to cover the true cost of child care that meets state licensing requirements and how much they would have to spend to cover the cost of a higher-quality program. On average, parents would need to spend 18 percent of their annual income just to purchase infant child care that meets licensing standards.
While all states provide higher child care subsidy payments for younger children, in most cases, this higher rate is insufficient to cover the difference between the cost of serving infants and serving older children. However, the infant subsidy rate is, on average, only 27 percent higher than the preschool subsidy rate.
In only eight states does the increase in the subsidy rate match the increased costs. Table A3 in the Appendix provides these data for each state.
Pick whatever source and statistic you like, because they all point to the same conclusion: Child care in America has become ludicrously expensive.
The average cost of a full-time child-care program in the U. Derek Thompson: The future of the city is childless. There are three broad reasons American child care now costs the same as buying a brand new Hyundai Elantra every year. Like health care and education, child care requires lots of domestic salaries, which means that its costs will continuously rise faster than overall inflation. The industry is highly regulated, perhaps reasonably so, given the vulnerability of the clientele—which is the second key driver of child-care costs.
As Jordan Weissmann has reported in The Atlantic , states with strict labor laws tend to have the most expensive facilities. Thanks to high turnover rates—a result of those low wages—companies have to constantly train new workers to meet regulatory standards.
Other costs include insurance to cover damage to the property and worker injuries, as well as legal fees to deal with inevitable parent lawsuits. The most expensive child-care facilities tend to be situated near high-income neighborhoods or in commercial districts, where the rents are high.
The state of American child care might be defensible if it were expensive and high-quality—or if it were crummy but cheap. Instead, the U. The typical family paying for any child care spends about 10 percent of their income on it, far more than in most similarly rich countries. But American day care is a shambles. New early-childhood startups such as Vivvi offer employer-sponsored child care. Read: Why daycare workers are so poor, even though daycare costs so much.
There is a deep disconnect in the way the U. Their website includes licensing information and resources for child care providers and parents. Monthly Child Care Affordability in Kentucky Child care services in Kentucky are affordable compared to other areas of the United States, but still inaccessible for many families. Monthly Child Care Costs in Louisiana Child care centers in Louisiana and all states vary in cost depending on their location, staff experience and the services they offer.
The median family would spend Monthly Child Care Affordability in Maryland Maryland has some of the most expensive child care costs in the United States and a large discrepancy between the cost of infant care and the cost of care for school-aged kids. The median family here would spend at least The typical child care provider would have to spend Monthly Child Care Costs in Massachusetts Child care services in Massachusetts are prohibitively expensive to most families.
Monthly Child Care Affordability in Massachusetts There are no states with more expensive child care than Massachusetts. Only the District of Columbia has less affordable child care than the Bay State. Many parents rely on before and after school programs to supplement their need for affordable child care.
Monthly Child Care Affordability in Michigan The loss of manufacturing jobs has made child care services less affordable for many Michigan families. More Information on Michigan Child Care The Michigan Department of Education manages child care licensing with strict requirements and provides valuable information and resources for parents and child care providers.
Monthly Child Care Costs in Mississippi Mississippi has some of the lowest child care costs by state. Mississippi does have the lowest housing costs and the fourth-lowest grocery costs in the U. More Information on Mississippi Child Care The Mississippi Department of Human Services provides parents who meet income eligibility requirements help with child care payments.
Visit their website for more information and a link to the application page. More Information on Missouri Child Care The Missouri government supports families with child care subsidies to assist with tuition payments. Check out their website for eligibility information and how to apply. The department is providing support for child care centers whose businesses were negatively impacted by COVID Monthly Child Care Affordability in Nebraska In Nebraska, child care services cost more than both rent and college tuition.
Child care providers can find information about licensing, child care grants and subsidy programs for Nebraska residents. Parents can visit their website to discover early education guides, child care assistance applications and other resources. More Information on New Jersey Child Care New Jersey is one of the smallest and most densely populated states, with the seventh-highest housing costs in America.
Parents can visit the Child Care New Jersey website to learn more about child care subsidies, how to choose a child care center, and how to find child care locally. New York State has also invested heavily in Early Head Start EHS programs and continues to offer partnership opportunities and award grants to child care providers that agree to meet the EHS performance standards.
The median family would have spent around Child care services in North Carolina are difficult to afford for low-wage workers. More Information on Oklahoma Child Care Parents can visit the Oklahoma Department of Human Services website for information about selecting quality child care and resources to help you discover affordable child care providers in your area.
Thousands of Oregon families would benefit from better access to affordable child care. More Information on Oregon Child Care Expensive housing, child care, transportation and groceries make Oregon the state with the fourth-highest cost of living. Parents can visit Oregon Early Learning for help finding high-quality and affordable child care services. This household would have had to allocate A minimum wage worker in Pennsylvania earns the Federal minimum wage and would have to spend You can visit the Department of Human Services website for application info and additional guidelines.
More Information on Rhode Island Child Care Rhode Island provides subsidized child care for children up to the age of 13, and in some cases, up to the age of
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