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Regional Variation in Child Care Prices: A Cross-State Analysis

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  • Davis, Elizabeth E.
  • Li, NaiChia

Abstract

A recent study reported that the average annual fees for full-time infant care in a child care center ranged from $3,803 in Alabama to $13,480 in Massachusetts. This study analyses this variation in state-level average child care center prices using a standard economic model of supply and demand. We found that a large proportion of the variation in average child care prices can be explained by a small set of variables, including median family income, wages paid to child care workers, and the number of young children in the state. Although the gov-ernment plays an important role in the child care market, the wide variation in average fees across states mostly reflects what parents can afford to pay. Given the importance of quality child care to current workforce needs and future human capital development, strategies to in-crease affordability such as child care subsidies and tax credits should be considered along with direct investments in quality improvements.

Suggested Citation

  • Davis, Elizabeth E. & Li, NaiChia, 2009. "Regional Variation in Child Care Prices: A Cross-State Analysis," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 39(1), pages 1-15.
    • Handle: RePEc:ags:jrapmc:132425
    DOI: 10.22004/ag.econ.132425
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    References listed on IDEAS

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    1. David M. Blau & H. Naci Mocan, 2002. "The Supply Of Quality In Child Care Centers," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 483-496, August.
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    5. Edwards, John H. Y. & Fuller, Bruce & Liang, Xiaoyan, 1996. "The mixed preschool market: Explaining local variation in family demand and organized supply," Economics of Education Review, Elsevier, vol. 15(2), pages 149-161, April.
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    Cited by:

    1. Eszter Baranyai, 2023. "The Socio-Economic Status of Neighbourhoods and Access to Early Childhood Education," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 16(3), pages 1019-1048, June.
    2. Andrea Rissing & Shoshanah Inwood & Emily Stengel, 2021. "The invisible labor and multidimensional impacts of negotiating childcare on farms," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(2), pages 431-447, June.

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