According to Childcare Aware of America, the national average cost of care in 2023 was $11,582 per year, or $965 per month, per child. In Indiana, the state average cost of care is $9,557 per year or $796 per month, according to the Economic Policy Institute. At first blush, those numbers seem large, but the investment in a child’s future is more than worth it.
Quality childcare and early learning is often labeled as “too expensive,” but it's important to recognize that this expense reflects the significant value and benefits these programs provide. From fostering early childhood development to supporting families and boosting the local economy, the investment in high-quality childcare yields returns that far outweigh its cost.
Why is Quality Childcare Expensive?
Quality childcare is more than just a safe place for children to stay while their parents work; it’s an environment where children are nurtured, educated, and guided through crucial stages of development. To provide this level of care, several key factors increase the cost:
Qualified Staff: High-quality childcare homes and centers require skilled and trained educators. These professionals must understand child development, behavior management, and early childhood education techniques. Competitive salaries and ongoing professional development are necessary to attract and retain such talent. Human capital is the largest expense for most businesses, and that holds true for childcare providers as well. The compensation for childcare provider roles, though still often much lower than it should be, constitutes a significant portion of the provider’s operating budget.
Safe and Stimulating Environment: Creating and maintaining a safe, engaging, and developmentally appropriate environment is required for all licensed providers in Indiana. Indiana’s Family and Social Services Administration Office of Early Childhood and Out-of-School Learning (OECOSL) oversees childcare, education, and out-of-school-time programs for our state. Compliance with strict health and safety regulations and quality requirements add to the operational costs.
Low Child-to-Staff Ratios: To ensure individualized attention and care, quality childcare homes and centers strive to maintain low child-to-staff ratios. This approach, while beneficial for the children’s development, requires hiring more staff per child, which increases operational expenses.
Comprehensive Programs: The State of Indiana utilizes the Paths to QUALITY (PTQ) program as its quality rating and improvement system, which is supervised by OECOSL. PTQ includes a range of activities and programs designed to support all aspects of a child’s development—physical, emotional, social, and cognitive. Compliance with PTQ requirements and increasing PTQ levels adds to the operational costs.
The Long-Term Benefits of Investing in Quality Childcare
Investing in quality childcare yields substantial benefits for children, families, and the local economy–it is truly worth the cost! Quality childcare provides an environment rich in learning opportunities which helps children develop the critical academic and interpersonal skills necessary for success.
Child Development: The early years are critical for brain development and have a greater positive effect on children who are at risk due to socioeconomic status or family circumstances. Investing in the early years of a child’s life means that there is less need for educational support and other intervention services later in life. Children who attend high-quality childcare programs are better prepared for school, perform better academically, and have better long-term outcomes in terms of health, behavior, and earnings.
Support for Families: For working parents, quality childcare is essential. It provides peace of mind, knowing that their children are in a safe, nurturing environment so they can focus on their careers. This support is especially important for single parents or families with dual incomes, where access to reliable childcare enables parents to maintain employment, pursue career advancement, and achieve a work-life balance.
Economic Impact: Quality childcare contributes significantly to the local economy. By enabling parents to work, it increases household income and spending, which in turn supports local businesses and services. Additionally, the childcare sector itself is a source of employment, providing jobs for educators, administrators, and support staff.
Affordability: Pulaski County has many families who struggle to make ends meet and struggle with the price. If Indiana’s average cost of care is $9,557 per year and the minimum is $7.25 per hour, that means that low-wage earners would spend nearly 85% of their total income on childcare for one child[1]. Affordable quality childcare is simply the right thing to do for all of Pulaski County’s youngest residents. By providing all children, regardless of their background, with a strong start in life, it helps to level the playing field and reduces long-term disparities in education, income, and health.
What Do We Do?
Michael J. Hicks, a business professor at Ball State University and whose articles are often seen in the Pulaski County Journal, recently completed a study on childcare in Indiana. He stated that for most families in Indiana, childcare “costs more than parents can earn by working.”[2] His study looked at how raising the wages of childcare workers would increase the availability of childcare for Hoosier families. However, raising wages also increases the cost of care.
Our businesses and state and local government can work together to help reduce the cost barrier to hard working families. Businesses have the opportunity to directly support employees through Dependent Care Flexible Spending Accounts, childcare stipends, and also by reserving seats or subsidizing tuition at local childcare providers. Our state offers childcare assistance through vouchers from the Child Care and Development Fund (CCDF) and the On My Way PreK (OMW) program for qualifying families. Local government could also invest in childcare infrastructure to ensure that Pulaski County is a welcoming place for working families.
The Pulaski County Early Learning Network is working throughout our county to bring businesses, government, and families together to create a solution that is right for our community. PCELN Founding Member and parent Katy Ruff shared, “The coalition is a step in the right direction, but for a lasting solution, we of course, still need the business community and residents to support childcare providers long-term. Families can also take more advantage of programs like On My Way Pre-K and the Child Care Assistance vouchers.”
While the cost of quality childcare may seem high, it is important to view it as an investment rather than an expense. The benefits for children, families, and the local economy are profound and long-lasting. By supporting quality childcare, we are not only investing in the future of our children but also in the well-being and prosperity of our communities.
[1] https://www.procaresoftware.com/blog/child-care-costs-by-state-2023/#IN
[2] https://www.greenfieldreporter.com/2024/08/07/michael-hicks-childcare-problems-are-vexing-and-costly/
About ChildCare Aware of America (CCAoA): CCAoA works with a national network of more than 500 childcare resource and referral agencies and other partners to ensure that all families have access to quality, affordable child care. Learn more at childcareaware.org.
About the Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank fighting for a world where every worker has access to a good job with fair pay, affordable health care and other benefits. Learn more at epi.org.
The Pulaski County Early Learning Network (PCELN) unites the voices of those with a stake in the future of our children, our workforce, and our community to craft an ongoing strategy to sustain a network of high-quality childcare in Pulaski County. Members are from a wide range of Pulaski County businesses, families, childcare providers, and local organizations. PCELN is currently housed at the Community Foundation of Pulaski County. For more information pceln.org, email This email address is being protected from spambots. You need JavaScript enabled to view it., or call the Community Foundation at 574-946-0906.
