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May 11, 2021, 2:47 p.m. EDT

Child care costs 14% of middle-class families’ income — Biden wants to cap it at 7%

By Joya Misra

President Joe Biden wants to  make child care more affordable  across the U.S.

Under his  American Families Plan , proposed in April, the federal government would subsidize the costs of child care to the tune of $225 billion annually. Lower-income families could access child care free of charge, while middle-class families would pay no more than 7% of their income.

Additionally, the plan seeks to make  free, high-quality preschool  available for all 3- and 4-year-olds.

Almost  60% of parents  say preschool and day-care expenses are a financial strain. Currently, child care eats up  14% of the incomes  of middle-class working families – for example, those with a household income of $50,000-$100,000 for a family of four – according to the Center for American Progress, a progressive think tank. For lower-income families, the share  rises to 35% .

As a scholar who studies  government support for working families  in different countries, I know that the United States  spends substantially less  on early education and child care than comparable nations. While the U.S. spends approximately  $2,500 a year  on child care and early education per child, the average in Europe is $4,700. Some countries, including Norway and Sweden, spend more than $10,000.

Impact of limited funding

Given the  devastating effects  of the pandemic on child care in the U.S., as part of the 2021 American Rescue Plan the federal government has added  $39 billion  to support child care providers, and an additional $15 billion in flexible funding for states to make child care more affordable.

This is in addition to  $10 billion  provided as part of a December 2020 COVID-19 relief package. Yet these one-time infusions  can’t solve  the long-term lack of child-care funding.

Federal spending is usually so limited that it reaches relatively few children. For example, the  Child Care and Development Block Grant Act  provides federal funding to states that provide child-care subsidies for low-income families with children under 13. Yet only  15% of the nearly 14 million children  who are eligible for these subsidies actually benefit from them.

Early Head Start and Head Start  are free, federally funded programs that promote school readiness for children ages 3-5 from low-income families. Early Head Start serves only 11% of eligible children, and Head Start serves  36% of eligible children . Despite  demand for Head Start servicesinadequate funding limits  how many kids the program can serve.

In other words, most working families cannot rely on these programs.

Benefits of subsidies

While the roughly  $10 billion  the federal government spends annually on Head Start and  $5 billion  on other child-care programs may seem expensive, spending on early childhood education pays  large dividends  and  boosts economic growth  – effectively generating more revenue than the programs cost.

Research  consistently shows  that children enrolled in early education programs are more likely to  go to collegeearn more moneyhave better health  and  not receive public assistance .

Indeed, a 2016 study shows that every $1 the government spent on high-quality early childhood education programs in North Carolina led to a  $7 benefit  to the economy. More money spent on child care means less spent on other government benefits like unemployment insurance and Medicaid.

Effective models for pre-K

Biden’s American Families Plan also seeks to build on the work of successful  state-funded preschool programs . Florida, the District of Columbia, Oklahoma and Vermont have adopted  nearly universal pre-K  for 4-year-olds, and some other  statescounties  and  cities  have begun to build these programs too. Universal pre-K programs are also being expanded to include  3-year-olds .

These programs work. For example, researchers studied the children who enrolled in the high-quality pre-K program in Tulsa, Okla., as 4-year-olds after they reached middle school.  They found  the pre-K alumni had better math skills, took more honors courses and were less likely to be held back in school than 4-year-olds who did not take part in the program.

Yet as of 2021  relatively few U.S. children  can attend high-quality preschool. Wealthier families are more likely to enroll their kids in  licensed child-care centers , which often have an early education component. This reinforces the  achievement gap  between  children  from poorer and wealthier families.

Based on all the evidence available, I have no doubt that higher government spending on early education and child care could dramatically change the lives of working families, improve the long-term life trajectories for many Americans and  strengthen the U.S. economy .

Joya Misra is a professor of sociology and public policy at the University of Massachusetts Amherst. This was first published by The Conversation — “US parents pay nearly double the ‘affordable’ cost for child care and preschool

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