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New Census Data: Child Care Consumes Large Portion of Poor Families’ Budgets

Poor families who paid for child care spent two-fifths (40.0 percent) of their income on care in 2010, according to a new Census report.  This is a sharp increase from 2005, when poor families who paid for child care spent 29.2 percent of their income on care.  Families just above poverty (those with incomes from 100 percent to 199 percent of poverty) who paid for child care also spent a significant portion of their incomes on care—17.0 percent in 2010, up from 14.5 percent in 2005.

The average amount spent on child care among families at all incomes levels who pay for care increased from $119 per week ($6,188 per year) in 2005 to $138 per week ($7,176 per year) in 2010 (in constant 2010 dollars). Given that many families’ income declined or remained stagnant during this time, these higher costs likely placed a major strain on their budgets.  Yet, families continued to pay for child care because they needed it to stay employed in a challenging job market.

With rising costs, some families cannot afford child care at all.  While families who paid for care were spending more for child care, the percentage of families (with employed mothers) paying for care actually declined—from 34.8 percent in 2005 to 32.1 percent in 2010.  Over two-thirds of all families with employed mothers, and over three-quarters of poor families with employed mothers, do not pay for child care.  Some of these families may have fathers, grandparents or other relatives available to provide care on a consistent basis for free.  But some of these fathers, grandparents, and relatives may be forgoing paid work and needed income to provide care.  And for those parents who do not have a family member to turn to for help, the inability to afford child care may mean they cannot work as many hours as they would like or must rely on a patchwork of arrangements. 

Even as child care costs have risen and more families have struggled in this economy, child care assistance has not expanded in response.  In many states, low-income families are often unable to receive help paying for child care due to long and growing waiting lists for assistance or restrictive eligibility criteria.  As a result, families are left with few good options—if they do not devote a substantial share of their budgets to child care, parents may be unable to afford the child care they need to work and ensure their children are in stable, nurturing care.   

 

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