Child Care Cost Burden*
About
Child care costs for a household with two children as a percent of median household income. The 2024 Annual Data Release used data from 2023 & 2022 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.3 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 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 U.S., the child care expenses for families that earn the median income is higher than 10%. In 2016, one out of four U.S. 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 Institute established child care costs for each county based on county-level data from 2008 to 2018 form the Department of Labor Women’s Bureau’s National Database of Childcare Prices and state-level data from Child Care Aware of America’s 2022 annual price of childcare report that was varied down to the county-level.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.
Data and methods
Data Source
The Living Wage Institute; Small Area Income and Poverty Estimates
The Living Wage Institute is a benefit corporation founded in 2023, leveraging over 20 years of expertise from the creators of the Living Wage Calculator, a leading public resource for living wage data in the United States. The Living Wage Calculator helps individuals, communities, employers, and others estimate the local wage rate that a full-time worker requires to cover the costs of their family’s basic needs where they live. Users can explore the living wage for other areas and household compositions on their website, where a public version of this data is hosted.
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.
Caution should be used when comparing these estimates across states
Childcare cost data are based on data reported separately by state to the Department of Labor Women's Bureau, 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.
Caution should be used when comparing these estimates across years
Caution should be used when comparing across years because there are variations in the data collection process and changes in underlying source data or methodologies year to year. Additionally, due to methods changes implemented by the Living Wage Institute for estimating child care costs, Child Care Cost Burden data from the 2024 Annual Data Release should not be compared with previous years.
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 Institute.
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 are not appropriate for measuring progress. Additionally, the median household income estimates are modeled and have specific drawbacks with regard to their usefulness in tracking progress in communities. Modeled data are not particularly good at incorporating the effects of local conditions, such as health promotion policies.
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
- Income
- Subcounty Area
The Living Wage Institute is the source for the child care cost estimates used in the Child Care Cost Burden measure. Users can explore other areas and household compositions on livingwage.mit.edu, where a public version of this data is hosted.
Child Care Aware of America (CCAoA): 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) : 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 summary measures 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 K, Waldfogel J. Chapter 9: Delivering high-quality early childhood education and care to low-income children: How well is the U.S. doing? In: Gambero L, Stewart K, Waldfogel J, eds. An equal start? Providing quality early education and care for disadvantaged children. Bristol, UK: Bristol University Press; 2014:193-218. https://doi.org/10.2307/j.ctt9qgznh.14
2 Lyonette C, Kaufman G, Crompton R. ‘We both need to work’: Maternal employment, childcare and health care in Britain and the USA. Work, Employment and Society. 2011;25(1):34-50. https://doi.org/10.1177/0950017010389243
3 Gould E, Cooke T. High quality child care is out of reach for working families. Washington D.C.: Economic Policy Institute; 2015: Issue Brief #404. https://www.epi.org/publication/child-care-affordability/
4 Federal Register. care and development fund (CCDF) program: A proposed rule by the Health and Human Services Department. 2015. https://www.federalregister.gov/documents/2015/12/24/2015-31883/child-care-and-development-fund-ccdf-program
5 Mattingly MJ, Schaefer AP, Carson JA. 2016. Child care costs exceed 10 percent of family income for one in four families. Durham: The Carsey School of Public Policy, University of New Hampshire; 2016: National Issue Brief No. 109. https://scholars.unh.edu/carsey/288
6 Living Wage Institute, Inc. 2024. Living Wage Benchmark Series.