NEW DATA: Childcare costs remain an almost prohibitive expense

U.S. families spend between 8.9% and 16.0% of their median income on full-day care for just one child, with annual prices ranging from $6,552 to $15,600 in 2022, the most recent year for which data are available. Even part-day care for school-aged children (e.g., before and after school care) comprises 8.1% to 9.4% of median family income: From $5,943 up to $9,211 for just one child. To put this into perspective, the median cost of a year’s worth of rent was $15,216 in 2022.

These are findings from the newly-released National Database of Childcare Prices (NDCP). Sponsored by the Women’s Bureau at the Department of Labor, the NDCP is the most comprehensive source of county-level childcare prices across the U.S. This update includes data from 48 states, the District of Columbia and Puerto Rico from 2019 through 2022, and builds upon the initial release of the NDCP which included data from 2008 through 2018.

Childcare prices can vary dramatically based upon the age of the child, the population size of the county the care is provided in and whether the care is center-based or home-based. Home-based preschool care in small counties is the least expensive type of full-day care, while infant center-based care in very large counties (typically densely-populated or urban areas) is the most expensive. Part-day care for school-aged children is least expensive in home-based care settings in small counties, and most expensive in center-based settings in very large counties.

Two updated interactive maps and an interactive dashboard show childcare prices and childcare prices as a share of family income at the county level. In nearly every county for which data were available, childcare prices were high relative to family income, potentially pricing many families out of paid child care. 

Looking at full-day center-based care for infants in very large counties, prices in 2022 made up a smaller share of median family income than in 2018 (16.0% and 19.3%, respectively), the last year of data available from the first round of data collection for the NDCP. For preschool home-based care in small counties, prices as a share of median family income changed very little between 2018 (9.2%) and 2022 (8.9%). Prices as a share of median family income for part-day care for school-aged children remained largely unchanged during this period.

In 2021, the American Rescue Plan (ARP) provided $24 billion in childcare stabilization funding for childcare providers and $15 billion in flexible funding for states to make child care more affordable. While NDCP data clearly indicate that child care remained prohibitively expensive for many in 2022, experts estimate that prices would have been even higher were it not for the ARP. They report that prices would have otherwise increased by 10% between June 2021 and June 2023. 

Despite the high price of child care for the 13.6 million parents who rely on paid caregivers, childcare providers still operate financially on the margins, and workers receive relatively low wages. In fact, prior to the start of the Covid-19 pandemic in early 2020, the childcare sector was facing severe challenges related to financial viability, sustainability, and access and affordability for families. Covid intensified these challenges for parents and providers.

Georgia Poyatzis is an Economist at the Women’s Bureau. Gretchen Livingston is the Branch Chief of Quantitative Research at the Women’s Bureau.