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• Brookings examined how much parents pay for daycare and preschool in the US, with the median price around $8,320 per year.
• These numbers should be interesting for those working in the sector, especially since pre-K development is so important for education outcomes. Are there ways to help low-income families afford quality care?
How much do parents spend on center-based daycare and preschool for their young children? In other words, what is the market price of these services? The answer is important for parents, government, policymakers, and providers.
Using nationally representative data from the 2016 Early Childhood Program Participation Survey I calculate hourly and annualized prices for parents who purchase at least eight hours a week of center-based care for a child under five who does not have a disability and do so without outside financial help in paying the fees. The results are analyzed by age of child, region of country, parental education, parental income, and hours of attendance.
For the country as a whole, the median price for a family with the characteristics described above is $8,320 a year and $5.31 an hour. Families spend somewhat more in the Northeast and West, and somewhat less in the South and Midwest.
Spending in absolute terms goes up with family income and education (e.g., a mean of $11,652 for families making more than $150k a year contrasted with $5,900 for families making from $50-60k a year). Conversely, spending as a percentage of family income goes down with rising socioeconomic status (e.g., 7% for families making $100-$150k vs. 12% for those making from $50-60k). Spending is inverse to the age of the child (e.g., $10,400 for infants vs. $6,500 for four-year-olds).
One of the most provocative findings is that infants who are receiving center-based care for at least 8 hours a week, as is the case for older age groups in the sample, are in center-based care for many more hours a week than older children. For example, median weekly hours for such infants is 40, whereas it is 24 for four-year-olds.
Read the full article about the market price for daycare and preschool by Grover J. "Russ" Whitehurst at Brookings.