Child-Care Crisis Costs Economy $172 Billion Annually

Excerpted from:
Child-Care Crisis Costs U.S. Economy $172 Billion Annually
By Megan Leonhardt
Barron’s

A new economic analysis released in Barron’s highlights the staggering national cost of the child-care accessibility gap in the United States. Drawing on data from the Carsey School of Public Policy at the University of New Hampshire, the report estimates that insufficient child care for families with young children now costs the U.S. economy approximately $172 billion annually.

Key Findings

• $134 billion of the total cost reflects lost earnings and reduced work participation by parents, particularly mothers, due to child-care breakdowns.
• $38 billion comes from lower productivity and higher absenteeism among working adults who must juggle care responsibilities.
• $37 billion in reduced federal, state, and local tax revenue is tied to decreased labor force engagement.
• Child-care breakdowns force many parents to make difficult workplace decisions:
• Over 60 % of parents with children under age 5 report missing work, arriving late, or leaving early due to care challenges.
• Around 27 % say care issues forced them to quit a job or decline additional work hours.
• The cost of child care itself remains high, with average annual center costs around $13,000 per child, a figure that often exceeds inflation and outpaces other household expense increases.

Why It Matters Nationally

The analysis underscores that child-care gaps are not just family problems; they are macro-economic concerns that depress workforce participation, limit gender equity in employment, and constrain national productivity and growth.

Policy Implications

• Increased access to reliable child care could:
• Boost workforce participation, particularly among mothers and other primary caregivers.
• Improve families’ economic stability and long-term earning potential.
• Increase federal, state, and local tax revenues by supporting stronger labor-force attachment.
• Reduce employer costs associated with turnover, absenteeism, and productivity while strengthening the pipeline of future workers.

Read the full article:
https://www.barrons.com/articles/childcare-economy-cost-report-c14b6ea4

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