Child care costs are so high, many families spend more on it than they do on rent—and women are paying the price for it with their careers. Here's why.
Raising children has always been—and likely always will be—pretty pricey. In spite of this, we're surprised to say it but in many US cities, people spend more on child care than they do on rent.
This statistic comes according to a new research paper from the Economic Policy Institute, which counts money spent on babysitters, nannies and day care as child care costs. According to Fortune, child care is defined as "affordable" if it takes up 10 percent of a family's budget—but for many people, child care costs swallow more than 30 percent. This is a new phenomenon: Costs have risen over 168 percent over the past 25 years, which means that child care costs hover around an average of $18,000 a year for most families.
This expense affects low-income families in more drastic ways—they're spending up to 30 percent of their annual incomes on child care—but wealthier families are affected too. In fact, child care costs can exceed in-state college tuition costs in 33 states.
Women pay the price
This has a major effect on the way American families reconcile these costs. The biggest societal factor caused by mounting child care prices? More and more women are leaving the workforce to stay at home and care for their kids. According to a Care.com survey, 69 percent of parents say child care costs have affected their career decisions, while a quarter have switched jobs for better family benefits. The number of working moms in the country is dwindling—which is surprising, as we had been seeing an upward trend in those numbers in previous years. In 2012, 29 percent of moms did not work outside the home compared to 23 percent in 1999."I absolutely think [the cost of child care] plays a role in a woman's decision to go to work," Elise Gould, a senior economist at EPI, said. "It is taking a toll on labor force participation and therefore on the economy."
