The concern is understandable. According to 2016 data compiled by Child Care Aware, the average annual cost of full‐time center‐based infant care varies dramatically nationwide, from $5,178 in Mississippi to $23,089 in the District of Columbia. That amounts to 27.2 percent of median single‐parent family income in Mississippi and fully 89.1 percent in D.C. Such high burdens not only have a crippling financial impact on poorer families but can make it uneconomic to work and pay for child care at the same time.
Yet none of the proposed solutions to costly care would make it cheaper. They would simply transfer the high costs to taxpayers. A better starting point would surely be to ask: Why is child care so expensive? One important answer, it turns out, is state‐level regulation. Staff‐child ratio rules and worker‐qualification requirements, in particular, increase prices and reduce availability, particularly in poor areas. These are things state legislators can do something about.
Suppose a staff‐child ratio is made more stringent, meaning that fewer children can be cared for per staff member, and qualification requirements for directors of infant centers are increased. These could theoretically improve care by heightening the quantity and quality of interactions with children. The regulations may even convince wary parents that their child would be well cared for, increasing demand for formal, center‐based care.
But both regulations raise the cost of serving a given number of children. These increased costs reduce supply, increasing prices and encouraging parents to use less‐costly alternatives. Child‐care centers could try to compensate by paying staff lower wages, but this may mean the industry attracts lower‐quality workers. They might also try to hire cheaper, lower‐quality support staff. Both could actually lower quality, rather than increase it.
Empirical research analyzing differences across states shows that the net effects of these requirements are costly and that relaxing them would have beneficial effects without significantly compromising quality. Mercatus Center economists Diana Thomas and Devon Gorry, for example, estimate that loosening ratios by just one child across all age groups would result in prices falling by 9 percent or more. That’s over $2,000 per year for a family using full‐time infant‐center care in D.C. Requiring lead teachers to have high‐school diplomas likewise raises prices by between 25 percent and 46 percent.