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12 A public investment in child care can effectively act as wage increases for millions of middle-class and low-income families, who are often in their lowest earning years as young adults. It is important to consider the long-term economic impacts of these findings, as the middle class is shrinking in most metropolitan areas and wage growth is increasingly concentrated among the richest households. However, the findings in this issue brief show that middle-class and low-income working families have less access to licensed child care but must spend a larger share of their income when they do pay for child care. Increases in the share of families paying for child care and the amount they are spending would not necessarily be a bad thing if families were using higher-quality care for their children. Finally, all families, regardless of their income level, frequently juggle multiple child care arrangements, with more than half of young children in multiple child care arrangements and nearly one-quarter using three or more arrangements. This is not surprising, given that higher-income families use licensed child care-which is likely to be safer and of higher quality-much more frequently than lower-income families. 11 Lower-income families spend a much higher percentage of their income on child care, while higher-income families spend more overall. Census Bureau found in a 2013 analysis of SIPP data. 10 This is also an 11 percent increase from the 8.9 percent of average family income spent on child care that the U.S. Department of Health and Human Services’ definition of affordability.

The results of the child care spending analysis show that among working families with children under age 5 that pay for child care, average child care spending amounts to nearly 10 percent of the average family income, or 40 percent higher than the U.S. The author analyzed family incomes, demographics, child care spending, and the number and types of child care arrangements used by families with at least one child under age 5. Census Bureau, offers broad-ranging, detailed information on households’ income dynamics, assets, health insurance, employment, participation in assistance programs, and child care arrangements, among other subjects. 9 (see Methodological note) This nationally representative survey, designed and implemented annually by the U.S. This issue brief reports findings from a new analysis of child care spending data from the most recent wave of the Survey of Income and Program Participation (SIPP), released in May 2019. 8 To understand better the cost burden on families and the types of arrangements that parents make to manage financially, this issue brief examines recent data on child care payments and patterns that provide insight into the types of child care that families use. In reality, most young children have working parents, making child care integral to family life. child care worker earns just $11 per hour. 6 Meanwhile, to the extent that child care is affordable for parents at all, this is only because the child care workforce effectively subsidizes child care costs with low worker wages. Even low-income families-whose children likely qualify for child care assistance-are often forced to pay for child care, since fewer than 1 in 6 subsidy-eligible children receives assistance.

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Under the current policies, most parents must cover the full cost of child care on their own, an expense that few can afford. 4 During this same time, income inequality has escalated, with wealth and incomes for the top 1 percent and the upper middle class pulling away from the rest of Americans. Over the past two decades, middle-class wages have barely kept pace with the rate of inflation, while the costs of securing a family in the middle class-including the necessary costs of housing, education, health care, and child care-have risen considerably.

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3įor those who do have young children, parenthood in the United States can feel like a relentless series of financial challenges.

fertility rate fell to a record low for the third straight year, falling below the replacement rate needed to keep the population constant from one generation to the next. 1 Absent large-scale policy action on this issue, young adults have reported child care expenses as the top reason they are having fewer children than they would like. Quality, affordable child care allows parents who want to work to stay in the labor force, encourages the healthy development of young children, and supports families at a stage in their lives during which small investments return large social dividends. American families are struggling with the costs of child care-a key element in the ever-rising expenses associated with middle-class opportunity.

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