Education Funding

Child Care Increasingly Expensive, Popular, Part of Economy

By Lillian Mongeau — September 04, 2015 2 min read
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Nearly half of American households with an employed mother and a child under 5 reported using a paid child-care provider, according to a July report on the economics of child care by the non-partisan public policy research organization, Committee for Economic Development.

Given that it is such an often-used service, the Committee for Economic Development report concludes, paid child care is a key part of allowing parents, especially mothers, to participate in the labor force. Service-providing industries with similar revenue were women’s clothing, waste collection and home-furnishing stores, according to the report.

Yet many families are unable to access affordable care.

“The average weekly cost of care roughly doubled in current dollars between 1997 and 2011", the report stated. “And yet, the share of households receiving assistance from any source to pay for child care declined from 7.3% in 2005 to 6.4% in 2011 (according to the most recent data).”

“Child Care in State Economies,” as the committee’s report is called, cites a lot of numbers based on the analysis of an economic research firm the committee hired to compile and analyze the data. In the past several years of reporting on child care, I’ve seen many calculations and facts and figures attempting to note the size of the industry. All differ slightly from each other. With that caution, here’s my short list of particularly interesting facts and figures from the report:

(In case my list isn’t quite enough, the entire detailed report, complete with footnotes, can be found here. Or, a shorter, executive summary can be found here.)

  • One-third (6.7 million) of preschoolers ages 4 and under are enrolled in organized care.
  • In 2011, employed parents paid an average of $143 per week ($7,436 per year) for child care with the cost varying greatly by state, setting, and age of child.
  • More than half (56.1%) of all children in organized child care have family income levels above $4,500 per month.
  • Children in poverty represent 22.8% of all children under age 15, but only 17.6% of children in organized child-care arrangements.
  • The highest child care usage rates are found in the upper Plains, the Pacific Northwest, New England, and portions of the Mid-Atlantic region
  • Primary care provided by fathers who were either unemployed or working part-time increased sharply beginning in 2009, particularly among those caring for preschoolers.
  • Federal and state child care subsidy programs provided $12.4 billion in fiscal year 2013 to help low-income families offset the high cost of child care.
  • Total federal and state child care assistance ($15.8 billion) equals more than one-third (37.8%) of total U.S. child care industry revenue.
  • The child-care industry employs1.5 million individuals supporting an additional 624,480 jobs in other industry sectors throughout the U.S.
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A version of this news article first appeared in the Early Years blog.