Thirteen percent looks almost polite on a spreadsheet. In a household budget, it can swallow the emergency fund, delay a home purchase, and turn “Should we order pizza?” into a miniature congressional hearing.
The U.S. Treasury Department reported in 2021 that the average family with at least one child under age 5 would need to devote about 13% of family income to child care. Newer research uses different methods, but it reaches the same broad conclusion: care remains one of the largest expenses facing American families, especially those paying for infants, multiple children, or full-time schedules.
What the Treasury’s 13% Child Care Figure Really Means
The estimate applied to families with a child younger than 5 who paid for care. It did not mean every U.S. household spends exactly 13%. Families using unpaid relatives, a stay-at-home parent, or public programs face different costs.
The report also relied on 2017 spending data. For a family earning $75,000, 13% equals $9,750 a year, or $812.50 a month. For a lower-income parent, the same tuition consumes a much larger share of earnings. For a higher-income household, price may be manageable while long waiting lists remain a serious obstacle.
Newer Data Show the Child Care Squeeze Is Still Real
Child Care Aware of America reported a national average annual child care price of $13,184 in 2025. That equaled about 10% of median income for a two-parent household with children and roughly 33% for a single-parent household. For two children in center-based care, the price exceeded median rent in every state with available data.
The Department of Labor found that full-day care for one child consumed 8.9% to 16% of median family income in 2022, depending on age and setting. Annual prices ranged from $6,552 to $15,600, with infant center care often the most expensive because babies require more adults per child.
The Federal Reserve’s 2024 survey found a median paid-care cost of $240 per week, or about $960 per month. For families using at least 20 hours weekly, the median reached $1,400 per month. More than half of paying parents spent at least half as much on care as on housing.
A 2026 Census Bureau paper found that 23.9% of households with children age 13 or younger paid for care in 2024, spending an average of $10,520, or 5.6% of income. That lower percentage reflects a broader mix of ages and arrangements, including school-age and part-time care. Comparing child care statistics without checking the population is like comparing a minivan with a stroller because both have wheels.
Why High Prices Do Not Produce High Provider Profits
Parents see a large tuition bill and wonder where it goes. Providers see payroll, rent, insurance, utilities, food, supplies, licensing, training, cleaning, and substitute staff. Both sides can be squeezed at once.
Child care is labor-intensive
Young children cannot be supervised by an app or asked to circle back after lunch. Treasury found that salaries and benefits account for at least half of typical program expenses and an even larger share in infant rooms. Yet the Bureau of Labor Statistics reported a median child care worker wage of only $15.41 per hour in May 2024.
Staff shortages shrink supply
In a 2025 survey of more than 10,000 early educators, 55% of program administrators said they had raised tuition during the prior year. Nearly half of respondents said burnout had worsened, about one-quarter were considering leaving the field, and more than half knew of a local program that had closed. A center can have open floor space and still close a classroom if it cannot hire qualified staff.
Why Treasury Called Child Care a Market Failure
Treasury argued that ordinary private financing is poorly suited to child care for three reasons.
Parents face the bill before earnings peak
Families often need the most intensive care early in their careers. Their income may rise later, but tuition is due now, and banks generally do not offer loans against possible future raises. Economists call this a liquidity constraint.
Quality care benefits the wider public
Early learning can support child development, school readiness, parental employment, and future productivity. Because many benefits extend beyond the household paying tuition, private spending may fall below the level that produces the greatest social return.
Providers face a cost floor and families face a price ceiling
A center that cuts tuition may have to reduce wages or quality. A center that raises tuition enough to improve pay may lose families. The market is caught between what safe care costs and what parents can afford.
The Burden Is Not Shared Equally
Single parents face one income and a bill that can resemble a second rent payment. Families in expensive cities may pay far above national averages, while rural parents may encounter long drives, few openings, and almost no evening or weekend care.
Care responsibilities also fall disproportionately on mothers. Federal Reserve data show that mothers are much more likely than fathers to identify as the primary caregiver and to reduce paid work because of child care. The true cost therefore includes lost wages, promotions, retirement savings, and career momentumnot just tuition.
Child Care Costs Reach Employers and the Economy
When care fails, parents miss shifts, arrive late, reduce hours, reject jobs, or leave work. Census researchers found that households reporting inadequate care lost an average of nearly 66 workdays. The Bipartisan Policy Center has estimated that one in three young children with all available parents working lacked sufficient formal care in its national gap analysis.
Business groups have documented related losses from absenteeism, turnover, and reduced economic activity. Child care is therefore economic infrastructure: roads help workers reach a job, while reliable care helps parents remain there after they arrive.
What Can Lower the Child Care Burden?
No single program fits every family. The system includes centers, licensed family homes, relatives, nannies, Head Start, public preschool, after-school programs, and informal arrangements. Effective solutions must address both family prices and provider supply.
Expand access to subsidies
The Child Care and Development Fund is the main federal subsidy program for low-income working or studying parents. Government Accountability Office data showed that about 2 million of nearly 8.7 million eligible children received subsidized care in an average month in fiscal year 2019. A 2024 federal rule capped copayments at 7% of income for participating families, but that limit does not cover every family in the private market.
Invest in providers and educators
Family assistance will not create a classroom if providers cannot hire teachers. Funding for facilities, compensation, training, startup costs, rural programs, and nontraditional-hour care can expand supply while protecting quality. Public preschool can also reduce costs for eligible 3- and 4-year-olds.
Make workplaces more parent-friendly
Employers can offer predictable schedules, flexible start times, dependent-care benefits, backup-care support, remote work where practical, or partnerships with local providers. A smaller company may not build an on-site center, but it can still ask employees which care problem is actually disrupting work.
What Families Can Do Now
- Calculate annual costs, including deposits, registration, closures, transportation, meals, and backup care.
- Compare tuition with the full value of staying employed, including insurance, retirement contributions, future raises, and career continuity.
- Check state subsidies, Head Start, public pre-K, military benefits, employer assistance, and tax benefits; eligibility rules change.
- Use a local child care resource and referral agency to locate licensed options and understand quality indicators.
- Join waiting lists early and build a backup plan for illness, school breaks, and provider closures.
These steps do not make care cheap. They replace some chaos with organized chaos, which is still an upgrade.
Conclusion: The 13% Figure Was a Warning
Treasury’s 13% estimate captured a structural problem: parents are expected to finance a labor-intensive public good during a financially vulnerable stage of life.
Newer studies use different definitions, but the message is consistent. Care can rival housing, absorb a third of a single parent’s income, disrupt careers, and strain employers. Meanwhile, educators earn modest wages and providers struggle to remain open. Thirteen percent is the headline; the deeper story is a system asking families and providers to perform financial gymnastics without supplying the leotard.
Family Experiences: What a 13% Child Care Burden Feels Like
The following are illustrative composites based on common cost patterns in national research, not interviews with specific families.
A two-income family that still feels squeezed
Imagine a couple earning $90,000 before taxes and paying the 2025 national average of $13,184 for one child. Care consumes about 14.6% of gross income, or roughly $1,099 per month. On paper, the household looks comfortably middle income. In practice, taxes, health premiums, rent, student loans, groceries, and transportation arrive first.
The couple may delay retirement contributions or replacing an unreliable car. A daycare closure creates a second cost: one parent uses paid leave, works late, or calls a grandparent who lives 45 minutes away. Tuition measures the price of the slot, not the effort required to keep the arrangement functioning.
A single parent facing a steeper percentage
Place the same $13,184 price against a single parent’s $52,000 income and care absorbs about 25.4% of gross earnings. A registration fee, deposit, or week of emergency care can push a credit card balance higher.
This parent may choose a job based less on career potential than on whether the schedule matches pickup time. A promotion with unpredictable evenings may be worth less than a lower-paying role with a reliable 4:30 p.m. exit. Child care shapes the negotiation before salary is even discussed.
Two children turn arithmetic into strategy
A family with an infant and a preschooler may pay more for care than for housing. Parents stagger schedules, grandparents cover one day, and vacation time becomes sick-child time. The plan can work until a caregiver becomes ill, a classroom closes, or an employer changes a shift.
That is why families often describe child care as a reliability problem as much as a price problem. The tuition bill is predictable; the disruptions are not.
The provider who raises tuition reluctantly
From the provider’s side, higher tuition may mean survival rather than expansion. Payroll is due whether every child attends. Rent, insurance, food, background checks, training, utilities, and supplies do not shrink when enrollment dips. If a teacher quits, a classroom may have to reduce capacity until a replacement is hired.
Parents may resent an increase while the director worries about losing staff to jobs that pay more. Both reactions are rational. Families and educators stand on opposite sides of the same invoice even though neither created the underlying economics.
Lessons families commonly learn
Pricing care before a child is born, comparing settings, checking benefits repeatedly, and calculating the multi-year value of staying employed can improve decisions. A backup planrelative, neighbor, flexible manager, alternate provider, or shared arrangementcan also keep a temporary closure from becoming a lost job.
Planning cannot repair the national child care market, but it can make one household less vulnerable to its sharpest edges.
