Economic Snapshot | Children

Capping child care costs at 10 percent of income would mean significant savings for families

It is well-known that high quality child care is out of reach for working families in the United States. If we capped child care costs for families at 10 percent of their income, families across the nation would see significant and much-needed savings. For families with one infant, the savings could range from $350 a year in Mississippi to over $8,304 a year in Massachusetts. Capping child-care expenditures at 10 percent for families with an infant and a 4-year-old would yield even greater savings—from $4,289 a year in South Dakota to $21,085 in Massachusetts. (Savings in Washington, D.C., are substantially higher; however, it is not included in these rankings because it is an urban area, versus a typical state, and because it has outlier levels of child care costs.)

We can improve families’ living standards—particularly for those families that need the most help—by capping child care at a certain percentage of family income, and we can further increase these savings by pursuing ambitious, quality-oriented child care reform. Investing in child care also has the potential to help not only families, but also the economy: capping child care at 10 percent of family income could boost GDP by as much as $210 billion thanks to an increase in parents’ labor force participation.

Economic Snapshot

Capping child care costs at 10 percent of income would mean significant savings for families across the nation: Savings to median-income families with children if out-of-pocket child care expenditures were capped at 10% of income, by state

State Savings to median-income families Share of median income freed up Savings to median-income families Share of median income freed up
Alaska $3,300 5.0% $10,952 18.9%
Alabama $516 1.1% $5,387 13.2%
Arkansas $1,301 3.2% $6,296 17.5%
Arizona $4,090 9.3% $11,587 31.7%
California $5,457 10.5% $13,687 31.4%
Colorado $6,164 10.9% $16,046 34.2%
Connecticut $5,182 7.1% $16,684 27.1%
Washington D.C. $16,272 39.7% $34,114 147.6%
Delaware $3,999 6.8% $12,267 24.2%
Florida $3,460 7.9% $11,128 30.9%
Georgia $2,103 4.4% $8,603 20.8%
Hawaii $788 1.2% $10,100 17.6%
Iowa $2,941 5.3% $11,157 23.4%
Idaho $1,810 3.9% $8,734 22.0%
Illinois $6,195 11.3% $15,762 34.9%
Indiana $3,201 6.6% $9,961 24.0%
Kansas $4,926 9.6% $12,877 29.5%
Kentucky $974 2.1% $6,473 15.6%
Louisiana $412 0.9% $5,326 12.5%
Massachusetts $8,304 11.8% $21,085 36.5%
Maryland $5,249 7.2% $14,349 22.5%
Maine $3,835 8.1% $10,705 26.5%
Michigan $3,888 7.8% $10,652 24.6%
Minnesota $6,712 10.8% $17,831 34.9%
Missouri $2,834 5.7% $12,142 30.3%
Mississippi $350 0.9% $4,347 12.1%
Montana $3,213 6.5% $11,135 26.8%
North Carolina $3,900 8.8% $11,492 31.3%
North Dakota $1,110 1.8% $8,621 15.6%
Nebraska $1,613 2.9% $8,456 17.5%
New Hampshire $3,627 5.2% $13,084 21.6%
New Jersey $2,671 3.5% $12,217 18.1%
New Mexico $3,272 8.4% $10,370 32.8%
Nevada $4,462 10.1% $12,580 35.0%
New York $7,461 14.2% $19,161 46.8%
Ohio $3,028 6.0% $10,369 24.0%
Oklahoma $1,561 3.4% $6,684 16.6%
Oregon $5,656 12.5% $14,443 39.5%
Pennsylvania $3,910 6.9% $11,982 24.7%
Rhode Island $6,155 11.3% $16,195 36.6%
South Carolina $1,336 3.0% $5,987 14.9%
South Dakota  $4,289  8.4%
Tennessee $647 1.4% $5,162 12.4%
Texas $3,122 6.6% $9,852 24.1%
Utah $2,058 3.6% $8,670 17.1%
Virginia $2,797 4.2% $10,754 18.5%
Vermont $4,676 8.6% $14,646 32.8%
Washington $5,854 10.4% $15,442 33.2%
Wisconsin $5,008 9.3% $14,477 32.4%
West Virginia $2,678 6.0% $8,491 21.9%
Wyoming  $5,453  9.6%

Source: EPI analysis of CCAA (2015) and U.S. Census Bureau American Community Survey

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