 "child care cost")
Around the world, rising inflation is pushing child care costs up to unprecedented levels. Average day care fees went up 6 per cent in 2023 from the previous year, according to ECA International, while in the US, costs jumped by 9 per cent. Reversing this trend is key to pulling economies out of recession, promoting growth and creating more equitable societies, but so far, many governments have done little to relieve the financial burdens facing parents of young children.
The stress falls disproportionately on women, who are usually the ones to take on the bulk of child care responsibilities. Given the choice of working just to afford daycare, women are opting to reduce their hours, forego promotions, or drop out entirely. Others are deciding to have fewer children, or none at all. Pressure to return to office hasn’t helped, as many mothers are only able to join or stay in the workforce under flexible arrangements.
“The economy as a whole pays a high price for leaving women out of the workforce,” said Adriana Dupita, an analyst at Bloomberg Economics.
In the US, an estimated $237 billion a year vanishes due to women paring back their workloads to care for kids. In the EU, that number is around $255 billion (€242 billion ). Study after study has shown that increasing female workforce participation, by contrast, increases output and reduces levels of inequality.
Governments and companies are experimenting with ways to accommodate working parents. In Japan, some businesses provide subsidised child care and family-friendly housing as part of employee benefit packages. In the UK, the government is planning to expand subsidised rates for childcare.
Americans currently pay among the most in the world for child care in terms of share of income, according to the latest OECD figures — a ratio that has worsened as costs have risen. In 2023, the average weekly daycare rate for one child in the US was $321, up from $284 the year prior. In New York City, the rates are around 16 percent higher. Partly as a result, the US has one of the lowest percentages of women in the workforce among developed countries.
