Joseph Pinto ’19

Mike is a high school art teacher and a football coach, and his wife Shannon works as an assistant controller at a small private college near their hometown in Indiana. Every morning, the older children are dropped off to before-school care, and the younger is sent to a church-based childcare. Afterward, both parents head to their full-time jobs.

When one takes a look at the family’s budget, childcare is the second largest expense–behind only their mortgage. The cost of the youngest child’s daycare is more than half the family’s monthly mortgage payment. When the end of the month rolls around and payments are due, the family has neither money for savings nor money leftover.


To try and combat this, Mike, after he works his full-time job and tucks his kids into bed, drives around for a few hours as an Uber driver. His hours are ridiculous, and his situation is unsustainable.


Mike’s family is not, by any means, alone. All across the country, parents struggle to deal with childcare costs, for it costs too much. Most young children in the U.S. have parents who work outside the home. In 56 percent of two-parent families with children under six, both parents work; in 65 percent of single-mother families, the mother is employed outside the home; in 83 percent of single-father families, the father is employed outside the home. Conservative estimates place the full-time cost of childcare at $196 per child per week or $10,000 per year. This can constitute up to 30 percent of a family’s total income, and the percentage gets higher depending on the family’s poverty level. A survey found that for nearly a third of families, childcare causes a financial problem. Three-quarters of those for whom childcare caused a financial problem described that problem as “very” or “somewhat” serious.


The consequences of the affordability of childcare are numerous, ranging from substandard care, which can have myriad negative effects on the children, to lost productivity for employers due to parents missing work to handle gaps in childcare or to care for a sick child, to lost wages and reduced retirement benefits for parents who have to drop out of the labor force to care for their young children, to lost opportunities for further education, college savings, and other investments that working parents could make for themselves and their children, but cannot afford because they are spending most or all of their disposable income on childcare.


Programs already in place are not effective enough. The Special Supplemental Nutrition Program for Women, Infants, and Children has too small a breadth of support and does not provide focused funding for childcare. Purchase of Childcare / Childcare Subsidy programs have infrastructural problems and are not good platforms upon which to build.


To fix this problematic situation, the government should offer subsidies in the form of Childcare and Education Savings Accounts (CESAs). Money from the government would be deposited into the CESA of any family who qualifies for the subsidy. The money can only be spent for childcare- and education-related expenses, but can be applied to both government and private childcare providers. When a parent buys childcare from a licensed childcare provider, they debit their CESA. The money can be carried over in the account each year to encourage college savings.


This subsidy program will help to ameliorate the financial burden of childcare on families. In addition, it will increase the ability of less affluent families to obtain quality childcare services. As children age, it will also help to encourage college savings.