Our new Data-for-Equity Research Brief, Child Care Affordability for Working Parents, finds that many U.S. parents who are highly attached to the labor force would have a difficult time purchasing full-time center-based care. This finding is especially true for low-income, Hispanic and black parents.
Child care is an important work support for parents. However, the cost of market-rate center-based care can be a barrier for families. This brief focuses on parents who work full time and full year, a group that encompasses over 70% of all working parents. While these parents are highly attached to the labor force, 21% are low income. Parents who both work full time and full year and are low income face affordability challenges when purchasing full-time child care at market price. Despite similar attachment to the labor force, Hispanic and black parents working full time and full year are more than twice as likely to be low income compared to white and Asian/Pacific Islander parents working these hours. Thus, Hispanic and black working parents are particularly vulnerable to child care affordability challenges.
Drawing on Current Population Survey and child care price data, this brief estimates the affordability of center-based care for parents with high labor force participation if they were to purchase full-time year-round child care at market prices without subsidies. We compare the estimated price parents would pay for center-based child care in their state of residence, adjusted for the number of children they have and the ages of the children, to their total family income.
Given the importance of child care for family and child wellbeing, in 2016 the U.S. Department of Health and Human Services set a federal affordability benchmark (i.e., the maximum percent of income a family should spend on child care) at 7% of total annual family income. We compare what parents would have to spend to purchase center-based care to this affordability benchmark.
Key findings about the affordability of child care for parents working full time and full year include:
Center-based care would cost low-income working parents 28% of income.
This 28% child care price to income ratio greatly exceeds 7%, the Department of Health and Human Services’ benchmark for affordability. However, the proportion of income that a working parent would spend on child care varies greatly by family income level. Families that are not low income would pay 8% of their family income towards child care, which is still above the federal affordability benchmark.
Market rate child care is unaffordable for a majority of working parents and for nearly all low-income working parents.
Nearly two-thirds of parents and 95% of low-income parents would spend above the 7% federal affordability benchmark for center-based care.
Black and Hispanic parents are more likely to experience unaffordable child care.
This brief finds that even for parents working a full-time year-round job, full-time center-based child care for young children and before- and after-school care for school-age children is largely unaffordable, as it would consume a high proportion of family income. Importantly, the working parents included in this analysis are those with the clearest need for child care, since they work full time and year round. State and federal policymakers, government officials, advocates, providers, the press and others can use the data in this brief to inform conversations about current and future child care programs and policies and how they may exacerbate or reduce inequalities.
Authors are affiliated with the Institute for Child, Youth and Family Policy, Heller School for Social Policy and Management, Brandeis University. Use this link to explore state and national child care affordability indicators at the national and state levels.