The Growing, Annual Cost of the Infant-Toddler Child Care Crisis in California

California’s working parents know how difficult it is to find child care that’s accessible, affordable, and high-quality. This problem is particularly acute for parents of very young children, as infant and toddler care is typically the least available and most expensive.

Further, children under age 3 are experiencing one of the most crucial periods of brain development. California employers know the economic impact of these child care challenges, that will only worsen as the child care crisis continues.

ReadyNation’s new national study found that America’s infant-toddler child care crisis now costs the nation $122 billion in lost earnings, productivity, and revenue every year. This staggering economic toll impacts working parents, their employers, and the nation’s taxpayers. Our 2018 study found that the crisis was already severely damaging the pre-pandemic economy, exacting a cost of $57 billion annually. A combination of COVID-19 and insufficient policy action have now significantly worsened the crisis.

California’s Gross Domestic Product (GDP) represents roughly 14 percent of the nation’s GDP. That suggests that the lack of reliable child care for working parents of young children, up to age 3, could come to an estimated $17 billion in annual costs for California.

Beyond its impact on the workforce and economy today, the infant-toddler child care crisis damages the future workforce by depriving children of nurturing, stimulating environments that support healthy brain development while their parents work.

As our data shows, a failure to strengthen the fragile child care infrastructure will lead to more and more economic damage to employers, workers, and taxpayers. State and federal policymakers must support evidence-based policies and programs that enhance the availability, affordability, and quality of child care, particularly for infants and toddlers. This includes supporting the child care workforce and the families they serve. With wise investments, policymakers can improve life outcomes for thousands of California children today and strengthen the workforce and economy both now and in the years to come.