Childcare
The early years of life are important for a child’s growth and well-being.
Healthy development means that all children can thrive in an environment where their social, emotional, and learning needs are met.[1] A safe and loving home and time spent with family play a big role in a child’s development.
When parents are at work, high-quality child care provides a nurturing environment to ensure children’s needs are consistently met throughout the day. High-quality child care means a safe and stable environment where children receive the attention they need to thrive.[2] Further, when there are fewer children per adult in a classroom, children are happier, less stressed, and more engaged.
Well-trained and fairly paid caregivers create higher-quality experiences for children, offering attentive, caring support. These high-quality environments often have better health and safety practices, reducing the risk of illnesses and injuries.
Caregivers with training in child development or early childhood education play a crucial role in fostering growth. Children in high-quality child care settings tend to perform better on cognitive tests, develop stronger language skills, and are more prepared for school.[3]
[1] CDC: Healthy Habits: Child Development
[2] Advance Data from Vital and Health Statistics; No. 187
[3] ASPE: Child Care Quality: Does It Matter and Does It Need to be Improved?
Here’s what you’ll learn:
How Economic Stability Impacts Olivia
Meet Beth—an 18-year-old barista working part-time while dreaming of a better future. Formerly unhoused, she now lives with her aunt. Despite her aunt’s encouragement to save 30% of her income, Olivia can’t afford living on her own. She hopes a career in welding will bring a stable income and independence.
Get to Know OliviaHow Economic Stability Impacts The Jackson Family
Meet Marcus—a devoted husband and father who loves playing basketball and watching cooking shows. Injured on the job, he hasn’t been able to work for months. With one child heading to college and a baby on the way, he is deeply concerned about his family’s financial future.
Get to Know The Jackson FamilyHow Economic Stability Impacts The Garcia Family
Meet Elena—a young mom and veteran juggling work, child care, and debt after the death of her partner. Elena is working with a VA case manager to find resources, affordable housing, and child care in her rural community.
Get to Know The Garcia FamilyHow Economic Stability Impacts Chris
Meet Chris—an underemployed substitute teacher and choir coach who dreams of becoming a full-time tenured professor. To make ends meet, he offers private piano lessons and relies on food pantries, all while carefully managing the public benefits he receives due to his visual disability.
Get to Know Chris
Terms to Know
A child care home is a residential structure in which at least six children receive child care from a non-custodial provider for compensation for more than four hours per day.[1]
[1] Public Health Law Center: Child Care Definitions and Exemptions – Indiana
An area with more than 50 children under age 5 that lacks child care providers. Or an area with more than three times as many children needing care as there are licensed child care spaces.[1]
A non-residential building designed for licensed child care.[1]
Early childhood education is for children who are not yet enrolled in kindergarten. The purpose is to improve social and academic outcomes for children through third grade.[1]
Informal in-home child care is provided by a relative, friend, neighbor, babysitter, or nanny. This type of care is not usually regulated by the government and can range from a few hours to full-time care arrangements.[1]
Licensed child care providers are granted authority to provide a service as regulated by the state. In Indiana, these providers must follow regulations to ensure children’s safety, including rules about caregiver qualifications, staff-to-child ratios, training, safety standards, and maintaining safe facilities.[1]
Unlicensed child care provided through a , ministry, or not-for-profit religious organization.[1]
[1] Brighter Futures Indiana – Selecting Quality Care
School-based programs aren’t required to have a license unless they serve infants or toddlers.[1]
Key
Facts
- Fewer than 1 in 3 children have a full-time stay-at-home parent.
- In most states, the cost of child care exceeds 7% of the state median family income, which is greater than the threshold for affordable child care.
- $21,642 is the average annual child care tuition for two children in Indiana.
- 55% of the Indiana population lives in a child care desert.
- The U.S. economy loses $122 billion annually due to child care challenges.
Child Care and Early Childhood Education Access
Before the COVID-19 pandemic, many communities faced significant challenges in accessing affordable, high-quality child care and early childhood education. Low-income neighborhoods and communities of color had fewer quality options, with providers less likely to participate in state quality rating systems. Rural areas also had fewer child care slots compared to urban areas.
The pandemic worsened these disparities. Enrollment dropped more sharply among low-income, Black, Hispanic, and dual language learner families. Child care centers in communities of color were more likely to close than those in predominantly white areas.
Barriers to accessing child care
- High cost of quality child care
- Lack of child care facilities in rural areas and child care deserts
- Low capacity at child care facilities
- Lack of child care facilities equipped to support children with disabilities or special needs
- Shortages in child care workforce
- Transportation needed to get a child to and from the facility
- Low-income eligibility limits and a lack of subsidized alternatives[1]
- Inadequate hours of service
Cost
The cost of quality child care is often out of reach for lower-income families. In 2023, the national average annual cost of child care was $11,582.[1] Yet a single parent with a median income would need to spend 32% of their household income to afford the average national cost, far more than the 7% maximum recommended by federal guidelines. For a married couple with children, child care costs could take up about 10% of their household income.
In Indiana, parents spend an average of $850 per month for one child in care and $900 per month for an infant.[2] A family with an infant and a 4-year-old can expect to pay $1,700 per month on child care.
Low-income families are affected the hardest by these costs. Child care expenses often come when parents are early in their careers, earning less and managing other major expenses like housing costs and student loans. This strain makes it difficult to afford necessities like food and shelter. In 2019, over 70% of families earning between $20,001 and $40,000 reported difficulty finding child care.[3]
Decrease in Subsidized Funding for Low-income Families
Only one in 10 eligible children in the U.S. receive federal child care subsidies. While 1.5 million U.S. children benefit from free or low-cost child care through the Child Care and Development Fund, 12.7 million eligible children miss out.[4] This gap is due to a complex application process, a shortage of nearby providers who accept subsidies, or families being unaware of available assistance.
Well-funded grants and contracts help child care providers stay in business, which maintains or increases the number of available options. These contracts also lead to more stable enrollment for infants and toddlers receiving subsidies.[5] Providers can hire and keep qualified staff and improve coordination between local and state systems.
[1] Child Care Aware of America – Annual Child Care Landscape Analysis
[2] Winnie: The Cost of Childcare in Indiana: A Comprehensive Guide
[3] The White House: Seven Facts About the Economics of Child Care
[4] Child Trends – Why millions of eligible children miss out on federal child care grants
[5] Improving Child Care Access, Affordability, and Stability in the Child Care and Development Fund (CCDF)
Disparities in Access
In 2024, Indiana ranked as the worst state for access to child care when measuring quality of life, with only 772 licensed facilities for nearly seven million people. This low supply drives up costs, with married couples earning a median income spending nearly 13% of their earnings on child care.[1]
Access to child care varies across the state, with more than half of Hoosiers living in child care deserts. The shortage is even more severe for certain groups—57% of Hispanic families and 72% of rural families live in areas without enough licensed providers. In contrast, high-income suburban neighborhoods are the least likely to experience child care shortages.
With these rising costs of quality child care, more parents are opting to leave their children with grandparents instead of using traditional child care facilities. In areas with fewer resources, parents are more likely to rely on unlicensed or home-based care, which lacks government oversight and regulation.
Transportation
Access to reliable transportation is crucial for pregnant individuals and families with young children to reach essential services like healthy food, well-child clinics, primary health care, child care, and parks.[2]
Households with young children often depend on cars over other modes of transportation because they offer speed, flexibility, and comfort. Most families drive to child care centers and combine this trip with their work commute. Limited access to child care in their neighborhood can be a major challenge for families without cars, especially those who want one but can’t afford it.[3]
Supply Shortages
Beyond basic standards in health and safety, the most important factor in quality child care is the interaction between the caregiver and the child. However, the child care market doesn’t provide enough funding to pay early child educators fairly or attract skilled workers to the field.[4]
Facilities with tight budgets may struggle to meet essential requirements like employee background checks, safe sleep practices, and CPR training.
Head Start, the federally funded program that prepares children under the age of 5 from low-income households for school, is struggling to meet demand. Head Start teachers earn about $39,000 annually—only 60% of what they could earn as kindergarten teachers in public schools.[5]
Federal funding isn’t enough to cover rising costs like rent and competitive teacher salaries. Because of this, eligible children often end up on waitlists and miss out on crucial opportunities in their development.
COVID-19 Impact
COVID-19 restrictions and families choosing not to re-enroll caused a decrease in child care enrollment. This led to financial strain and forced closure for some providers, particularly in rural, low-income, and diverse communities.[6]
During this time, many children missed out on meals and snacks, with some not getting enough to eat or having limited access to fresh produce at home. Staffing shortages, especially among kitchen staff, also affected the quality of meals served.
Virtual learning and limited outdoor play in lower-income urban areas likely reduced children’s physical activity. As enrollment dropped, programs lost revenue, leading to temporary and permanent closures and creating new child care deserts. When facilities reopened, many programs faced staffing shortages due to low wages.
[1] CNBC: These are America’s 10 worst states for quality of life in 2024
[2] ITDP: The Effects of Transportation on Early Childhood Development
[3] Journal of Transport Geography: Decisions & Distance: The relationship between child care access and child care travel
[4] American Progress: The True Cost of High-Quality Child Care Across the United States
[5] NPR: Head Star’s shortage of funds means it’s unable to find teachers as students suffer
[6] Center for Nutrition: Impact of COVID-19 on Child Care Programs, Potential Solutions & Emerging Opportunities
Key
Takeaways
- More than half of Hoosiers live in child care deserts. The high cost of care, especially in low-income and rural communities, makes it difficult for families to find and afford quality child care.
- The child care workforce struggles to attract and retain skilled workers due to low wages and insufficient funding. Programs like Head Start are unable to meet demand.
- The pandemic worsened existing disparities, causing a decline in child care enrollment, particularly in low-income and rural areas. Many providers were forced to close, and those that remained open faced staffing shortages.
Other
Economic Stability
Topics
Employment and Income
Stable jobs with fair pay and safe conditions improve health outcomes. Income, education, and employment shape health-related behaviors like diet and exercise.
Housing Stability
Safe, affordable housing is a foundation for health. Stability in housing impacts well-being, especially for those facing trauma, poverty, or chronic challenges.
Low income: Children in poverty are disadvantaged academically, emotionally, and socially, which can have a lasting impact.[1] Access to affordable, convenient, high-quality child care programs can alleviate many challenges impoverished children face.
Employment and gender: The COVID-19 pandemic exposed the fragile state of employment and caregiving in the U.S., with school closures leading to a sharp drop in employment. Mothers’ employment fell by nearly 16% from February to April 2020.[2]
[1] One Place: The Impact of Poverty on Child Care
[2] U.S. Department of Labor: Mothers’ employment has surpassed pre-pandemic levels, but the child care crisis persists
Educational: Having access to quality early childhood programs boosts educational attainment and earning potential. These programs are often unavailable to the many people who live in child care deserts.[1]
[1] Healthy People 2030: Early Childhood Development and Education
Health risks: Children in daycare are more likely to catch an infection, which can force these children to stay home and for their parents to miss work. Yet, exposure to germs in day care can also improve a child’s immune system over time.[1]
Health outcomes: Early child education can improve children’s short- and long-term health outcomes.
[1] Medline Plus: Day care health risks
Transportation and walkability: People living in rural areas may drive long distances for child care. Only 42% of the federally funded Head Start centers that provide school readiness programs are within walking distance.[1]
Rural areas: Rural parents’ options for child care , in-home providers or a long drive to the nearest child care center.[2] The high cost of care makes it even harder for many families. Young families may choose to live elsewhere without access to affordable, quality care.
[1] Indiana Capital Chronicle: State lawmakers weigh ongoing child care ‘deserts’ across Indiana
[2] Indiana Capital Chronicle: State lawmakers weigh ongoing child care ‘deserts’ across Indiana
Aging and social supports: Many parents, like grandparents, rely on social and community support to help with child care costs. About 25% of older adults in Central Indiana feel physically, emotionally, or financially burdened by caregiving.[1] Relying on grandparents for child care can also create tension in family relationships.
Criminal justice involvement: Parents returning from incarceration must prove they can care for their children before regaining custody.[2] However, they often receive little help in finding housing, employment, and child care.
Immigration status: Children of immigrants make up one in four kids under age 6 in the U.S. These families are more likely to be poor, have less education, and speak languages other than English at home.[3] Low-income immigrant children are less likely to attend child care or early education, even though these programs can significantly boost school readiness.
[1] Central Indiana Senior Fund: ‘Purpose to get up and get going’: Grandparents play vital role as childcare providers
[2] Urban.org: Families left behind: The hidden costs of incarceration and reentry
[3] Urban.org: Child Care Choices of Low-Income, Immigrant Families with Young Children