Report | October 25, 2023

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

Impact on families, businesses, and taxpayers could cost the state $11.4 billion each year

Texas’ 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. Texas 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. For example, the Texas child care workforce is now 12 percent smaller than it was prior to the pandemic.

Texas’ Gross Domestic Product (GDP) represents roughly nine 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 $11.4 billion in annual costs for Texas.

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.

The infant-toddler child care crisis has a magnitude of impact on two generations. Parents struggle to go to work or school without access to affordable, high-quality child care creating economic implications for their families, but their infants and toddlers also miss out on the research-proven benefits that high-quality child care can provide.

Katie Ferrier, Vice President, Education & Workforce Development, San Antonio Chamber of Commerce

As our data from the past four years shows, a failure to strengthen the country’s 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 and affordability of high-quality child care. In particular, Texas policymakers must invest in child care and in the early childhood workforce to ensure that the rest of the workforce can work and be competitive. With wise investments, policymakers can improve life outcomes for millions of Texas children today and strengthen our state’s workforce and economy both now and in the years to come.

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