Insight | January 07, 2020
一本道最新高清无码There's something else keeping Susan and Peter up at night besides their newborn and 2-year-old: wondering how to pay the bills. Child care, in particular, is eating into their budget. It’s far more than the cost of repaying their student loans, and approaching the cost of their rent. They’ve deferred trying to save for a down payment for a home. Susan is even thinking about quitting her part-time job for a few years and staying home with kids.
As Susan and Peter, and millions of parents with very young children can attest, the list of expenses for a family unit can be never-ending. From housing and medical bills to child care and food, a paycheck, or even two paychecks, can only go so far. The good news is that family income at the national level has grown somewhat: For a family of four (two adults, two children), real median family income rose by 18.7% from 1990 to 2018. However, is this enough to help families meet their obligations—especially families with young children?
In many states, child care can cost as much as or more than housing and has skyrocketed over the last few decades.
This Insight focuses on one particular cost, child care, and how it compares to other family budget burdens, especially housing. Child care is an unavoidable expense for working parents, especially single parents and parents with younger children. In many states, child care can cost as much as or more than housing, and this cost has skyrocketed over the last few decades
The real (inflation-adjusted) price of child care increased by nearly 49% from 1993 to 2018 (Exhibit 1), according to the Bureau of Labor Statistics’ Consumer Price Index (CPI).
Laughlin, Lynda 2013. “Who’s Minding the Kids? Child Care Arrangements: Spring 2011.” Current Population Reports, P70-135. U.S. Census Bureau, Washington, DC.
Mattingly, Marybeth J., Andrew P. Schaefer, and Jessica A. Carson. 2016. "Child Care Costs Exceed 10 Percent of Family Income for One in Four Families." National Issue Brief No. 109, the Carsey School of Public Policy, University of New Hampshire.
1 Housing is captured by the CPI component “shelter,” which includes rent and owner’s equivalent rent (OER)—the amount of rent that would need to be paid to substitute a currently owned house as a rental property. The Bureau of Labor Statistics (BLS) uses OER in computing its shelter index rather than the current property value because it is immune to wide fluctuations in house prices. This modest increase in the housing cost at the national level is not representative of increases in any specific housing market. For example, housing in Denver increased by 39%, while housing in Detroit and Cleveland declined over the period.
2 Throughout this Insight, child care expenditure estimates using the Survey of Income and Program Participation (SIPP) data are based on families that have non-zero child care expenses (that is, while the survey sample includes families who have zero out-of-pocket child care costs because they receive subsidies, use parental/relative care, or for other reasons, these cases are excluded from the analysis).
3 Two other studies estimate somewhat lower, but still high, monthly costs: $665 (Kubota 2018) and $636 (Herbst 2018). Kubota (2018) reports a real hourly rate based on actual reported hours of care. To provide a full-time estimate, a weekly average of 40 hours was used for the conversion. The full-time estimates in Herbst (2018) were similarly calculated using hourly rates. Herbst estimates median rather than mean values, arguing that the cost distribution in his sample is skewed toward a few large values, which may make averages less representative.
一本道最新高清无码4 American Community Survey–Census Bureau. Table B25088 for owner cost (with and without mortgage), Table B25058 for rent (contract rent).
一本道最新高清无码5 For details, see
6 The share is 10.5% for children ages 0–4.
一本道最新高清无码7 See Laughlin (2013, Table 2) ().
8 This measure of family burden is based on state-level data from CCA and is constructed using expenditures on center- based and family day care (averaging across the two) divided by the median income of families with children at the state level. The 10.5% estimate in Exhibit 4 is lower because it includes all care types, whereas the 13.3% number is restricted to center-based and family day care.
一本道最新高清无码9 Laughlin (2013, Figure 4) (). Herbst (2018) also finds that the proportion of families paying for care with the youngest child under 5 decreased from 59% in 1990 to 41% in 2011.
10 Laughlin (2013, Table 3) ().
一本道最新高清无码11 See, for example, Heckman (2006), Heckman et al. (2010), and Hendren and Sprung-Keyser (2019).
一本道最新高清无码12 See Blau and Kahn (2013); Kubota (2018).
13 See Mattingly et al. (2016).
PREPARED BY THE ECONOMIC & HOUSING RESEARCH GROUP
Sam Khater, Chief Economist
Doug McManus, Director of Financial Research
Kadiri Karamon, Senior Quantitative Analyst
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