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If you’re struggling to pay for childcare, you’re not alone. The United States has one of the most expensive child care systems in the world.
This was one of the key discoveries of the new Bank of America. report A paper published on February 22 analyzed how high child care costs can slow women’s growth in the U.S. workforce.
Using data from OECDthe International Economic Union of 38 countries; Bank of America estimated the average cost of child care for a couple with two children and compared this to the average combined wages of a couple with the same profile. Thirty OECD countries were included in the analysis.
american bank We found that the average American couple with two children spends more than 30% of their combined wages on child care.
Of the 30 countries analyzed, only New Zealand had a more expensive system, while Germany and Austria had the most affordable systems. The average childcare cost in all 30 countries was less than 15% of a couple’s wages.
“Given that child care responsibilities have traditionally fallen disproportionately on mothers, rising child care costs raise concerns about increasing women’s labor force participation,” the report’s authors write. , “As costs have increased over the past several decades, the proportion of women in the workforce has stagnated.”
Women in the United States are working at near record levels. As of January, about 78% of women ages 25 to 54 in the United States were working or looking for work, according to Bank of America.However, American women still unlikely In most of the OECD countries analyzed, women have a higher status in the labor force than women. One of the reasons for this is the difference in childcare fees.
Bank of America’s report does not address why child care costs are higher in the U.S. than in other countries, and the company declined to discuss the topic with Business Insider.
Why are childcare costs so high in the US?
Business Insider estimated in January that caring for a young child will cost about $25,714 in 2024, after taking into account costs such as rent, food, clothing, transportation, childcare, and health insurance. .
of labor intensive nature Increased demand in the childcare industry, along with adult-to-child ratio requirements, is a key factor driving up costs. But this is not limited to the United States.
The main reason child care costs are higher in the United States than in other developed countries is that other countries allocate a larger percentage of their government spending to child care.
US spends Approximately 0.4% Early education and childcare accounts for 0.8% of GDP in the average OECD country. No country spends more than Iceland, which accounts for about 1.7% of its gross domestic product (GDP).
new york times analysis Of the OECD data published in 2021 We found that the United States spends about $500 per child annually on early childhood education, compared to more than $14,000 in the average OECD country.
“If you’re going to invest in early childhood and child care, you’re going to need an investment from the federal government to come forward and think about the return on investment,” Cindy Lehnhoff, director of the National Child Care Association, previously said. business insider.
Ultimately, it’s up to Congress and state governments to balance child care spending with other budget priorities. Additional child care funding could have been provided through the Build Back Better Act of 2021, but it was ultimately cut from the final package.
In addition to increasing the number of women in the workforce, reducing child care costs could motivate some U.S. couples to have children.A recent study by Beijing-based Youhe Population Survey found that high childcare costs are one of the main reasons for the decline in births in China. rate.
“Caregiving responsibilities continue to disproportionately fall on women, ultimately hindering their ability to enter, remain and advance in the workforce,” the report’s authors wrote.