Panel Paper: A Multi-Source Examination of the Rising Cost of Child Care in the United States

Saturday, November 10, 2018
Johnson - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Kendall Swenson, Kimberly Burgess, Laura Erickson and Kelly McKenzie, U.S. Department of Health and Human Services

Policymakers and researchers increasingly argue that affordable child care is an important component of supporting working families and fostering child development. However, there is public concern that the cost of child care has increased in recent decades and is a growing burden on family budgets. This paper examines evidence from an array of data sources to rigorously assess the issue. It tracts these trends by stratifying the average cost of child care by household income reported by families in six nationally-representative household surveys, including the: Current Population Survey (ASEC), Consumer Expenditure Survey, National Household Education Survey (NHES), Panel Study of Income Dynamics (PSID), and the National Survey on Early Care and Education (NSECE). These data trends are then compared to changes in the out-of-pocket expenses of families as reported in administrative data from child care subsidy programs. The study shows that, despite differences in survey designs, the empirical results show fairly consistent patterns. Although households are not more likely to have out-of-pocket expenses than similar families in the past, the amount of these expenses has increased, especially among families in the upper part of the income distribution.