Here’s How Much Child Care Costs Have Increased For Families Since the Last Election
Written by
Dawn Allcot
Edited by
Maria Concepcion
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The return-to-work push following the pandemic created unexpected challenges for working parents. After staying home with their children for more than a year, balancing parenting with their job duties or relying on a close circle of friends or relatives to care for their kids, parents now had a tough choice to make.
Could they adjust work schedules to minimize a need for daycare, swallow the rising costs to keep their children in daycare, potentially get a second job or side gig to do so, or leave the workforce altogether?
Did childcare costs actually rise during the pandemic or did the loss of pandemic-era incentives affect childcare affordability? It is not just that parents forgot about the pain of paying that monthly daycare bill; costs have increased dramatically since 2019, several studies show.
Childcare Costs Up More Than 30% Since 2019
Bank of America internal data, reported by EdwardConrad.com, showed that the mean childcare payment per household has risen more than 30% since before the pandemic, rising steadily between 2019 and 2023.
The study showed that the average family spent more than $700 per month in September 2023. The Child Care Stabilization program, which subsidized child care providers as part of pandemic relief, expired in September 2023.
Daycare Costs Rose 13% Between 2022 and 2023
Another study from Care.com, which matches parents with qualified, background-checked caregivers, found that daycare costs for infants jumped 13%, from $284 per week to $321 per week between 2022 and 2023.
For toddlers, costs jumped from $268 to $293 per week for one child, and from $510 to $556 for two children. Families with two toddlers in daycare paid an average of $2,040 per month in 2022 and $2,224 in 2023.
That’s significantly more than the average U.S. mortgage payment in 2022, which was $1,768, based on the Council for Community and Economic Research data.
The Care.com study found that 47% of parents spent more than $1,500 per month on childcare in 2023, with 49% expecting to spend the same in 2024. Twenty percent of respondents reported that they spend $3,000 per month or more on childcare.
Of course, childcare costs vary by state. Areas with a higher cost of living, like Washington D.C., Alaska, Massachusetts, and Washington, pay more than the national average for an infant in daycare, with costs as high as $419 per week in Washington, D.C.
Supply and Demand Coupled with Inflation Leads to Rising Costs
The Care.com study analyzed the reasons for rising childcare costs. Most people believe overall economic inflation is the biggest factor. Meanwhile, childcare centers have increased rates to accommodate rising salaries as well as inflation. Finally, with so many daycare centers closing during the pandemic, the U.S. faces a shortage of childcare options.
“With the majority of families in America being dual income, there is widespread demand for child care and not enough supply to meet it,” Bryan Jamele, head of government affairs and public policy for Care.com, stated in the report. “The imbalance of supply and demand existed pre-pandemic, got worse during and because of the pandemic, and is now at its most extreme due to the child care cliff.”
The end of childcare subsidies led to what experts have called the “child care cliff,” where daycare centers closed at the same time parents had to return to their offices. This led to a severe shortage of childcare, driving prices even higher.
The Century Foundation reported that the loss of $24 billion in funding could lead to more than 70,000 providers suffering economic consequences, ranging from increased fees and shrinking enrollments to a need to shutter their doors, Care.com reported.
Can Government Policies Help?
Parents are seeking support and looking to this election year as an opportunity for sweeping changes. According to Care.com, 88% of survey respondents said a candidate’s position on childcare policy will influence their vote. Meanwhile, 59% said access to affordable childcare is among the top issues impacting their voting choice.
As various states across the U.S. introduce paid family and medical leave programs to support new parents within the first year of a child’s life or adoption, it’s not enough. National initiatives to introduce affordable, quality care throughout a child’s first five years are crucial for our economic future.
“A healthy economy depends upon the ability for people to save and spend, but given the crushing weight of child care costs, those pillars are crumbling,” said Care.com CEO Brad Wilson in the report.
More From GOBankingRates
