Household child care costs have spiked more than 30% since 2019
The average child care payment is up 32% from 2019, according to new data from the Bank of America Institute. The price surge outpaced overall inflation; the Consumer Price Index was up 20% over the same period.
Why it matters: Rising costs pose a threat to the remarkable progress that women, particularly mothers, have made in the U.S. labor force.
- The report found that cost increases might be driving some parents out of the workforce to look after their children. (Typically, it's women who wind up dropping out for child care reasons, but the BofA data doesn't look at gender.)
Zoom in: The report looked at anonymized data from 68 million Bank of America accounts, and analyzed those where customers paid for child care.
- To understand if some parents left the workforce, researchers analyzed the number of paychecks those households receive — it's a way of finding dual-income households — and found fewer today compared with 2019.
Go deeper: The average family with child care costs spent more than $700 on it during September.
- That's cutting into other things. Since May 2023, families who pay for child care have been spending at a slower pace than other households — and dipping into savings at a higher rate.
- Still, households' overall savings are much higher than 2019 levels, notes Anna Zhou, an economist at BofA who worked on this report. "They're still financially OK."
What to watch: This data doesn't cover what's happened since the end of September, when pandemic-era federal child care funding ran out. Most observers expect costs to rise even further; and for some providers to go out of business.
- The Biden administration has asked Congress for $16 billion in new child care funding — part of an overall request for domestic spending.