High Child Care Costs Underscore the Need to Support Families With Children

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Without access to affordable child care, parents may struggle to find and keep jobs or to go to school. Unfortunately, California ranks as one of the least affordable states in the nation based on the cost of child care.[1] Statewide, the median annual cost of care for an infant in a licensed child care center is over $15,000. In a family with two working parents earning low wages, each parent would have to work 147 hours per week to avoid paying more than the federally recommended 7% of income on the cost of child care for their infant.[2] The annual cost of care in a licensed center for older children is also out of reach for many families — $10,200 for a preschool-age child and $5,800 for a school-age child. While prices may be lower with a licensed home-based provider, this option is still prohibitively expensive for families who are struggling to cover basic expenses.

Parents typically incur the highest-priced care — for infants and toddlers — at a younger age when they can least afford it. Even families with older children may struggle to find affordable care before or after the school day or when they are working nonstandard hours. Family supports such as subsidized child care and development programs can help boost families’ economic security by providing stable and affordable child care. According to a Budget Center analysis of federal survey data, an estimated 2 million children from birth through age 12 were eligible for child care assistance in 2017.[3] Across all age groups, only a small share of eligible children were enrolled in a subsidized program: 1 in 9 infants and toddlers (11.6%), 1 in 5 preschool-age children (22.1%), and 1 in 15 school-age children (6.7%). [4] (For additional data by age, see Tables 1 and 2 below.)

The high cost of care coupled with the large number of children eligible for child care assistance underscores the need for additional state and federal investments in California’s subsidized child care and development system. Child care assistance is critical to supporting low- and moderate-income families while parents are at work or school and is vital to helping families achieve economic security. Providing additional access to child care assistance should be a key component of state and federal budget deliberations.

This analysis is the second part of a multiphase effort to analyze subsidized child care and development programs in California. Other phases of this work examine the total unmet need for subsidized child care and unmet need by race and ethnicity. Support for this Fact Sheet was provided by First 5 California.

[1] Child Care Aware of America, The US and the High Cost of Child Care: A Review of Prices and Proposed Solutions for a Broken System (2018).

[2] The US Department of Health and Human Services updated its guidelines on child care affordability in 2016. Access the final rule at https://federalregister.gov/d/2016-22986. “Low wage” is defined as earning less than $14.35 per hour. See University of California Berkeley Labor Center, Low-Wage Work in California (August 2018).

[3] Budget Center analysis of US Census Bureau, American Community Survey data. Data limitations likely result in a conservative estimate of the number of children in California who are eligible for subsidized child care. For more information about the methodology used to calculate this estimate, see the Technical Appendix.

[4] Figures reflect children enrolled in the full-day California State Preschool Program (CSPP) or in one of the following subsidized child care programs: Alternative Payment Program; CalWORKs Stages 1, 2, or 3; Family Child Care Home Network; General Child Care; and the Migrant Child Care and Development Program. Enrollment is for October 2017, except for California Community College CalWORKs Stage 2, which reflects a Department of Finance estimate for the 2017-18 fiscal year. This analysis also includes the full-day CSPP, which consists of part-day preschool and “wraparound” child care, because it accommodates many — although not all — families’ work schedules throughout the year, and thus approximates the experience that a child would have in a subsidized child care program. In contrast, this analysis excludes roughly 97,000 children who were enrolled in the part-day CSPP, without access to wraparound child care, in October 2017. This is because most families with low and moderate incomes likely need wraparound care in order to supplement the CSPP’s part-day, part-year schedule. This analysis reports enrollment data for a single month — as opposed to a monthly average for 2017 — because the California Department of Education (CDE) does not typically separate part-day and full-day CSPP enrollment when reporting monthly averages for a single fiscal year. The CDE also states, “Caution should be used when interpreting monthly averages as some programs do not operate at full capacity throughout the entire year (e.g., State Preschool) while other programs have seasonal fluctuations in enrollment (e.g., Migrant Child Care).” Finally, the data are for October 2017 because the CDE’s point-in-time reports are only available for the month of October. See Kristin Schumacher, Millions of Children Are Eligible for Subsidized Child Care, but Only a Fraction Received Services in 2017 (California Budget & Policy Center: January 2018).

Table 1

Table 2

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Children of color are more likely than white children to live in poverty in California, largely due to a legacy of racist policies and practices and ongoing discrimination.[1] These persistent inequities have limited opportunity and economic mobility for many families of color.[2] Living in poverty increases the odds that children will experience hardships that adversely affect their development, health, and well-being.[3] California’s subsidized child care and development programs aim to mitigate the effects of poverty by boosting families’ economic security and supporting child development. Because children of color are more likely to live in families with low incomes, they are disproportionately eligible for child care and development programs. In California, children of color make up nearly 74.7% of all children ages 12 and under, but comprise 86.1% of children eligible for subsidized care. This gap is widest for Latinx children (52.3% of the 12-and-under population, compared to 68.1% of children eligible for care).

Overall, of the more than 2 million estimated children birth through age 12 who were eligible for subsidized child care and development programs, just 1 in 9 were enrolled in a subsidized child care program or the full-day, full-year California State Preschool Program.[4] The share of eligible children enrolled in a state program was low across all racial and ethnic groups, ranging from 8.3% of eligible Asian and Pacific Islander children to 30.0% of eligible black children.[5] Nearly 1.4 million Latinx children were eligible for subsidized care, but only 126,100 (9.1%) were enrolled in a state program. Even for black children — the demographic group with the highest share of eligible children enrolled in a full-day, full-year program — roughly 2 out of 3 eligible children did not receive subsidized care.

Governor Newsom has signaled the intent to continue to invest in California’s subsidized child care and development system. Boosting funding for this system is a key way to reduce barriers to success for children of color. Yet, policymakers should use a race-equity lens to ensure that new funding is targeted to children, families, and communities of color that have historically been left behind.

This analysis is the second part of a multiphase effort to analyze subsidized child care and development programs in California. Other phases of this work examine the total unmet need for subsidized child care and unmet need across different age groups. Support for this Fact Sheet was provided by First 5 California.

[1] Alissa Anderson, If The Poverty Rate for Kids of Color Were As Low as That for White Kids, 977,000 Fewer Kids Would be in Poverty (California Budget & Policy Center: April 2018).

[2] Ruth Cosse, et al., Building Strong Foundations: Racial Inequity in Policies that Impact Infants, Toddlers, and Families (CLASP and Zero to Three: November 2018).

[3] Center on the Developing Child at Harvard University, The Foundations of Lifelong Health Are Built in Early Childhood (July 2010) and Slopen, et al., “Racial Disparities in Child Adversity in the US: Interactions With Family Immigration History and Income,” American Journal of Preventive Medicine 50 (2016).

[4] Budget Center analysis of US Census Bureau, American Community Survey data. Data limitations likely result in a conservative estimate of the number of children in California who are eligible for subsidized child care. Families are eligible for subsidized child care if the child who would receive care is under the age of 13; the family establishes an appropriate eligibility status, such as by having an income below the limit set by the state; and the family demonstrates a need for care, such as parental employment. For more information about the methodology used to calculate this estimate, see the Technical Appendix.

[5] Figures reflect children enrolled in the full-day California State Preschool Program (CSPP) or in one of the following subsidized child care programs: Alternative Payment Program; CalWORKs Stages One, Two, or Three; Family Child Care Home Network; General Child Care; and the Migrant Child Care and Development Program. Enrollment is for October 2017, except for California Community College CalWORKs Stage Two, which reflects a Department of Finance estimate for the 2017-18 fiscal year. This analysis also includes the full-day CSPP, which consists of part-day preschool and “wraparound” child care, because it accommodates many — although not all — families’ work schedules throughout the year, and thus approximates the experience that a child would have in a subsidized child care program. In contrast, this analysis excludes roughly 97,000 children who were enrolled in the part-day CSPP, without access to wraparound child care, in October 2017. This is because most families with low and moderate incomes likely need wraparound care in order to supplement the CSPP’s part-day, part-year schedule. This analysis reports enrollment data for a single month — as opposed to a monthly average for 2017 — because the California Department of Education (CDE) does not typically separate part-day and full-day CSPP enrollment when reporting monthly averages for a single fiscal year. The CDE also states, “Caution should be used when interpreting monthly averages as some programs do not operate at full capacity throughout the entire year (e.g., State Preschool) while other programs have seasonal fluctuations in enrollment (e.g., Migrant Child Care).” Finally, the data are for October 2017 because the CDE’s point-in-time reports are only available for the month of October. See Kristin Schumacher, Millions of Children Are Eligible for Subsidized Child Care, but Only a Fraction Received Services in 2017 (California Budget & Policy Center: January 2019).