The increasing cost of child care in the United States is leading many families to reconsider their plans for having children. Between 2020 and 2024, child care expenses surged by 29%, significantly outpacing inflation, according to data from Child Care Aware of America. New research suggests a direct link between rising child care costs and declining fertility rates in the country.
In a recent study, Abigail Dow, a Ph.D. candidate in economics at Boston University, examined the relationship between child care pricing and family planning decisions. Her findings indicate that as child care prices increase, many American families opt to postpone or forgo having additional children. Dow analyzed data from the Women’s Bureau at the Department of Labor, covering the years 2010 to 2022.
She identified a “shock” to child care prices, specifically related to regulations that require smaller group sizes and lower staff-to-child ratios. Such regulations lead to increased costs for families. Dow’s research revealed that a 10% rise in child care prices for children aged birth to 2 years correlates with a 5.7% decrease in birth rates among women aged 20 to 44. Additionally, she noted that these price hikes delay the timing of first births by approximately four months and extend the interval between a first and second child by half a month.
The impact of high child care costs is particularly pronounced among women aged 30 and older, who often have more at stake in terms of career investments and earnings. Dow pointed out that younger women face less financial risk in temporarily leaving the workforce to care for children, making them less sensitive to child care costs.
Research into child care pricing has previously been conducted in European countries, but Dow’s study is distinctive in its focus on the United States, where government support for child care is less robust and paid family leave is not guaranteed.
While child care costs are a significant factor in declining fertility rates, they are not the only consideration. Other studies have indicated that rising housing and health care prices also contribute to families’ decisions about having children. A recent survey conducted by YouGov, the Wheatley Institute at Brigham Young University, and Deseret News found that a record 71% of participants believe that raising children is unaffordable, a notable increase of 13 percentage points since 2024.
The survey highlighted that the high cost of raising children was cited as the primary reason for family size limitations, surpassing other factors such as personal desire or lack of a supportive partner. For the first time in the survey’s history, affordability emerged as the leading concern for families considering their childbearing options.
Support for government intervention to alleviate these financial burdens has gained traction. The same survey indicated a growing majority favoring universal day care and enhanced tax credits for parents. Opposition to such measures has decreased by 10 percentage points since 2021.
As families navigate the financial challenges of raising children, the outlook may be worsening. Dow’s research only extends through 2022, and since then, federal relief funds for the child care sector have diminished. In states like Arkansas and Indiana, support for child care has been cut, with Indiana halting new enrollments in its subsidy program and reducing reimbursement rates for providers. These changes have led to the closure of over 100 child care facilities in Indiana alone, imposing an additional cost burden on parents.
While Dow emphasizes the importance of child care regulations for ensuring health and safety, she advocates for making child care more affordable. She asserts that parents, particularly mothers, increasingly base their decisions about family size on the affordability of child care. “Anything we can do to make child care more affordable seems important from a policy perspective,” she stated.
As the landscape of child care costs continues to evolve, the implications for American families remain profound, influencing their choices regarding parenthood and family planning.
