Investing in child care could save Maryland families thousands of dollars each year

April 8, 2016 by Kali Schumitz in Blog, Economic Opportunity, Education, Policy Topics

As parents throughout the state already know, enrolling an infant in daycare in Maryland can now costs more than the tuition for a state college, putting this much-needed service out of reach for many working families. This might limit how much a parent can work, or force them to rely on substandard care.

Child Care

Photo by Pink Sherbert Photography

Addressing this challenge  as part of a national commitment to early childhood care and education would not only help families who are struggling to make ends meet it would provide a major boost to the state’s economy, according to new research from the Economic Policy Institute.

Average annual child care costs in Maryland are $13,932 for a family with an infant and $9,100 for a family with a 4-year-old. Less than 28 percent of Maryland families are able to afford infant care, based on a U.S. Department of Health and Human Services standard that defines child care as “affordable” if it costs 10 percent or less of a family’s income. By the same metric, less than half of Maryland families are able to afford care for a 4-year-old.

This is a problem for parents because it means some can’t afford to work, and it has long-term consequences for children who don’t get the benefits of early childhood education. Educators have long known and studies have shown that children in high-quality preschool programs do better in school all the way through and are more likely to graduate from high school. When fewer children can participate in such programs because of the cost to their families, our society is worse off.

Investing in quality child care and early childhood education would have significant benefits for Maryland’s economy, as well, because more people will be able to work and parents will have more money to spend on other necessities. The report’s authors estimate that Maryland’s gross state product could increase by $4.4 billion if policymakers took their recommended steps, such as subsidies to allow more parents to afford high-quality child care and providing high-quality pre-kindergarten education in public schools.

Reducing child care costs to 10 percent of family income would save the median family with an infant in Maryland $5,249 a year. The median family with an infant and a four-year-old, meanwhile, would save $14,349 a year. Basing a family’s child care costs on their ability to pay would create even greater savings for lower-income families.

Existing programs such as Head Start and child care assistance for low-income families are helpful to those who have access to them, but these programs often have long waiting lists and leave too many families behind. Many states, including Maryland, have struggled to expand public preschool programs and other early childhood programs in the wake of the Great Recession. As the national and state economies recover, it is clear that this is the time to consider the type of “ambitious national investment” that the EPI researchers propose, which will immediately begin to help children, their families, and our economy.