Childcare Costs, Reduced Work, and Financial Strain: New Estimates for Low-Income Families

"According to new survey data from the Federal Reserve’s 2023 Survey of Household Economics and Decisionmaking (“SHED”), low-income families are more likely to reduce work to care for young children while high income families are more likely to pay for care.^[i] These differing decisions have financial consequences, as families who reduce work are less well off financially than those who are not reducing work. Although families who pay for care are better off overall, child care costs are still a notable expense. On average, families who pay for care pay about half as much for that care as for housing each month. This analysis suggests how government and private sector support for child care might vary by income

Families handle care responsibilities differently across income levels

As shown in Figure 1, families at different income levels make different decisions about how to care for their children. Households with young children and that make less than $75,000 per year are more likely to provide care themselves, with about 35 percent of these households reducing work to care for children. As income rises, the share of households using paid child care rises – from 17 percent for those making less than $24,000 to 41 percent for those making more than $150,000. The highest earners are unlikely to reduce work to care for children, without only about 14 percent of households doing so.."
Childcare Costs 

Trends in Child Care Spending from the CCDF and TANF

"The Child Care and Development Fund (CCDF) is the main source of federal funding dedicated primarily to child care subsidies for low-income working families. The term “CCDF” was coined in regulation by the U.S. Department of Health and Human Services (HHS) to encompass multiple child care funding streams, including
 federal discretionary child care funds authorized by the Child Care and Development Block Grant (CCDBG) Act,
 federal mandatory child care funds authorized by Section 418 of the Social Security Act (sometimes referred to as the “Child Care Entitlement to States”),
 state maintenance-of-effort (MOE) and matching funds associated with the Child Care Entitlement to States, and
 federal funds transferred to the CCDF from states’ Temporary Assistance for Needy Families (TANF) block grants..."
Child care spending

Who's Minding the Kids:Child Care Arrangements, Spring 2010

"Among fathers with a wife in the workforce, 32 percent were a regular source of care for their children under age 15, up from 26 percent in 2002, the U.S. Census Bureau reported today. Among these fathers with preschool-age children, one in five fathers was the primary caregiver, meaning their child spent more time in their care than any other type of arrangement.

The series of tables titled Who's Minding the Kids? Child Care Arrangements: Spring 2010 showed that in a typical week, 12.2 million (61 percent) of the 20 million children under age 5 were in some type of regular child care arrangement.

As married women have increasingly moved into the labor force, fathers have become more available for child care while their wives are working..."