Childcare costs take a chunk out of household budgets

The cost of care for families with two children now exceeds rent in most areas of the U.S., according to new data from the Economic Policy Institute.
OCT 06, 2015
By  Bloomberg
Just when you thought rent was too damn high, more evidence now shows that childcare costs are too damn higher. Among families with two children, the price of care exceeds rent in 500 of 618 areas, according to data compiled by the Washington-based Economic Policy Institute, a resource group that advocates for workers. Families in Binghamton, N.Y., are the worst off. There, childcare is almost three times as expensive as checks to landlords. EPI mapped the disparities in housing and childcare costs, building on August research that tackled how family budgets could (or couldn't) handle those bills. The map below shows the amount of money a two-parent, two-child family would need to spend to live a modest life. The darker the blue, the higher the costs. (Map: U.S. disparities in housing and childcare costs)​ A booming population of millennials, now entering prime child-bearing years, has added to demand for daycare that's outpacing supply. That's pushing those childcare costs up faster than overall inflation, and has some economists worried that either consumer spending or labor-force participation (already quite low) could suffer as a result. Nationally, the costs of childcare and nursery school have surged 168% since the end of 1990 compared with a 76% increase in total consumer prices, according to the Bureau of Labor Statistics. In a large swath of the U.S., childcare costs also exceed that other hefty line-item on family budgets: college tuition. Residents in 33 states and Washington, D.C. pay more for infant care than for the average in-state college tuition at a public, four-year institution, EPI reported. "Parents of an infant are going to be, on average, younger than the parents of a college kid so they're going to be earlier in their careers and it's going to be even harder for them to make these kinds of payments," said Elise Gould, EPI senior economist and co-author of the report. "It's not surprising that many women drop out of the labor force, so there are costs to this."

Latest News

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a mother-son tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

Women share investing strengths, asset preferences in new study
Women share investing strengths, asset preferences in new study

Financial advisors remain vital allies even as DIY investing grows

Trump vows to 'be nice' to China, slash tariffs
Trump vows to 'be nice' to China, slash tariffs

A trade deal would mean significant cut in tariffs but 'it wont be zero'.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.