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Why Is Childcare Getting Even More Expensive?

July 18, 2016
Economics and Finance
Rebecca Greenfield

For many parents, putting a kid in daycare costs more than the rent. And the price continues to climb. The expense of childcare, which includes both daycare and nursery school, has outpaced inflation since the recession, according to data from the Department of Labor. From 2009 through 2016, the overall Consumer Price Index increased about 12 percent while the childcare and nursery school index (yes, there is one) jumped more than 21 percent, according to data provided to the Bureau of Labor Statistics. In other words, people are shelling out a lot more cash on their kids than on anything else.

The prevailing theory is that staffing daycare centers is expensive and there’s no way to make it cheaper. Taking care of kids is labor-intensive while increasing the productivity of workers difficult. One person can only look after only so many kids, and regulations demand certain adult-to-child ratios for safety and quality reasons. But those explanations don’t answer why it’s getting so much more expensive. What could possibly be pushing the prices so high? What is it about caring for children that has gotten so costly?