U.S. Childcare Cost Higher Than In Other Developed Countries

U.S. childcare costs surpass those in all other OECD countries when taking into account single parents and couples earning average wage. The price tag for having two children minded while working full-time is also significantly higher in the U.S. than in most other developed countries that are part of the organization. Only Switzerland, the United Kingdom and New Zealand come even close to the high price parents have to shoulder for childcare in the United States.

According to 2022 data from the OECD, U.S. couples who both earn average wage in full-time jobs and have two young children need to spend 20 percent of their disposable household income on childcare. For singles on average wage, this rises to 37 percent. In most countries, single parents pay less as they receive a more favorable rate.

In Switzerland, the most expensive OECD country after the United States, couples with two children spent a whopping 32 percent of their disposable income on childcare if working full-time and earning average wage. For singles, this was lowered to 18 percent, however. In the U.S. and Switzerland alike, childcare is dominated by the private sector and does not receive substantial amounts of regulation or subsidies, leading to high market rates. Treasury Secretary Janet Yellen has called this state of childcare in the U.S. a "broken market".

Many Anglophone nations, also including Ireland, New Zealand and Australia struggle with high private market rates for childcare, low subsidies or a combination of the two. In 2022, Canadian couples working full-time for average wage still needed to shell out 19 percent of disposable income, but the government has since made changes. Like in Canada, many English-speaking nations began to regulate and subsidize their childcare markets much later than elsewhere, leading to them lagging behind in affordability despite the topic of childcare becoming ever more important in the face of demographic change. Outside of Anglophone OECD countries, couples paid the most for childcare in relative terms in the Netherlands - another place dominated by private childcare - at 19 percent of disposable income. Singles paid the most in the Czech Republic at 18 percent.

In many European countries, parents paid substantially less, often just a couple of percent of their disposable incomes, as childcare centers are either run as a public service or private providers are heavily subsidized and regulated. In France, parents who work full-time and earn average wage spent between 6 percent and 10 pecent, while this number was even lower in South Korea, other German-speaking, Scandinavian and Baltic countries. In Germany, rates were as low as 1 percent of disposable income as all parents receive childcare vouchers depending on work time to be redeemed at private or public institutions. Working parents pay a small fee on top if they receive more than the standard five care hours. Free childcare was provided in OECD countries Italy and Latvia as well as in associated nations Bulgaria and Malta. Single parents also paid no fees in Greece and were substantially unburdened in Canada, under rent subsidies in the United Kingdom and under social assistance benefits in Japan, if they qualified for those.