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Lack of Access to Formal Child Care Could Cost the U.S. More Than $140 Billion

The findings from BPC’s latest report, The Economic Impact of the Child Care Gap, show that the country’s lack of access to formal child care for 3.4 million children in 35 states, including the District of Columbia, could cost the United States an estimated $142 billion to $217 billion in economic productivity over the next 10 years.

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How much additional child care does the country need?

In 2020 using the most comprehensive child care supply dataset to date, BPC calculated that 31.7% of children under six with all parents in the labor force come from families without access to formal child care facilities—America’s child care gap.

What is the economic impact of the child care gap?

After discovering the child care gap for children below six with all parents in the workforce, BPC calculated the economic benefit of filling the gap, versus the economic cost of failing to do so.

The findings in this report show that the country’s lack of access to formal child care for 3.4 million children in 35 states including the D.C costs the U.S. an estimated $142 billion to $217 billion in economic productivity over the next 10 years.

The report provides the first known estimates of the burden imposed on the U.S. economy by the country’s gaps in child care. The report identifies and monetizes the impact that the child care gap has on families, businesses, and tax revenue. The analysis estimates one year’s economic loss to each entity plus the residual burden over the next 10 years.

What is the nationwide economic impact of the gap?

What is the state-by-state economic impact of the gap?

The economic impact of the child care gap also varies by state . The chart below shows the low and high estimates of the sums of burdens on households, businesses, and tax revenues for each state.

With data quantifying the cost to the economy of each individual gap in the child care supply and an interactive map that provides such findings by state, congressional district, and county, policymakers now have a starting point from they can begin to estimate the return on investment of building our country’s child care supply. Policymakers and advocates can use this data to calculate the potential return on their investments in closing the country’s child care gap.

Note: BPC recognizes that child care gaps in rural and urban areas can vary greatly. Our most recent survey focused on child care in rural America and can be found here.

It is important to keep a few things in mind, our findings represent:

  1. The economic impact of potential gaps in the child care supply, not the impact of other child care issues like unaffordability or actual demand;
  2. The economic impact of potential gaps in only 35 states, including DC, not all 50 states;
  3. An estimated range for the impact over 10 years, not one single estimate.

To learn more about the methodology and findings, please read our full report. Additionally, engage with our interactive child care gap map to learn more about the gap in your state.

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