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Child Care Cost Burden*

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About

Child care costs for a household with two children as a percent of median household income. The 2022 County Health Rankings used data from 2021 & 2020 for this measure.

When child care is affordable and accessible, it can increase opportunities for parents or guardians to pursue further education or participate in paid work to earn income, and in some cases, gain healthcare and retirement benefits to support their families.[1,2] When much of a paycheck goes toward child care expenses, households face difficult trade-offs in meeting other basic needs such as paying rent or mortgage, affording doctor visits, healthy foods, utility bills, and reliable transportation to work or school. Research has shown that, in addition to supporting economic security for families, access to high-quality child care contributes positively to a child’s health and development and can provide life-long benefits, especially for children from low-income or socially marginalized households.[1]  

While children living in low-income households benefit the most, high-quality child care is the most out of reach for low-income households.[1] Modest earners are less likely to have access to pre-tax withholding to defer the costs of child care, and when available these benefits privilege higher earners because the household must pay for the child care upfront and later claim reimbursement. As a result, children from low-income households are more likely to attend child care that is of lower quality than the opportunities available to their peers.[1] When low-income families pay for child care, they tend to spend a larger proportion of their income on care versus more affluent families.[1] For families supported by one minimum wage earner, the option to pay for child care is out of reach. One study found that for a full-time minimum wage earner supporting an infant and a 4-year-old, child care expenses range from 62% of minimum-wage income in South Dakota to 184% of minimum-wage income in Washington D.C..[3]  

Difficulty affording child care is not a problem that is isolated to low-income families. The Department of Health and Human Services has historically considered child care affordable if the expense consumes less than 10% of household income, and more recently proposed an affordability threshold set at 7% of household income.[4] In many locations in the US, the child care expenses for families that earn the median income is higher than 10%. In 2016, one out of four US families (1.4 million families) paying for care for children under the age of 6 spent more than 10% of their income on child care expenses.[5] For some families, the prohibitive costs of child care and lower earnings of women due to the gender pay gap are reasons for female guardians to leave the paid workforce and stay at home to provide child care.[2] 

The Living Wage Calculator established child care costs for each county based on market rate surveys published by each state, databases of local providers, and by contacting providers in a state directly.[6] This is an improvement on other widely available sources of child care cost data which only report costs at the state level, or at the county level in only select states.  

Find strategies to address Child Care Cost Burden*

Data and methods

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.

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 US 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. https://www.federalregister.gov/documents/2015/12/24/2015-31883/child-care-and-development-fund-ccdf-program 
[5] Mattingly, M. J., Schaefer, A. P., and Carson, J. A. 2016. Child Care Costs Exceed 10 Percent of Family Income for One in Four Families. The Carsey School of Public Policy at the Scholars' Repository. 288. 
https://scholars.unh.edu/carsey/288 
[6] Glasmeier, Amy K. 2020. Living Wage Calculator. Massachusetts Institute of Technology. livingwage.mit.edu. 

 

 

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