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Cost of Childcare

In actuality, the problem of the high costs of childcare raises serious problems in face of many parents. In this regard, low-income families and, especially low-income single mothers are in a particularly difficult position because they suffer from the lack of financial resources to raise up their children. In such a situation parents need to work to earn money for living, whereas work takes too much time and they need childcare services, which, though cost too high for them. In such a situation, many low-income families suffer from poverty and cannot provide their children with normal standards of living, including normal nutrition. However, it is not only low-income families suffer from high costs of childcare but also single-mothers as well as families, who have to limit their work opportunities to provide their children with essential care. As they refuse from their work, they apparently decrease their income, but if they keep working they still have to cover high childcare costs. In such a situation, the government support is essential to help parents to afford childcare costs and to maintain, at the least, normal standards of living.

Basic childcare costs

On analyzing childcare costs, it is important to define the major costs of childcare, which become unaffordable for many families. First, education is one of the major item, which many families cannot cover, especially, low-income families. Today, education is unaffordable for many families. In spite of basic education children can obtain in public schools, they have substantial problems associated with the higher education. Low-income families cannot afford college education and higher education for their children.

Health care costs are particularly significant because they are virtually unaffordable for many families. As parents have to work to maintain health care insurance or participate in different state-supported programs. Health care costs still keep rising. In addition, families should cover such costs as babysitting and others because parents have to work to afford childcare costs and to provide their children with education and elementary health care services.

Challenges associated with high costs of childcare for low-income families and single mothers

Many families, especially low-income families face the dilemma as they have to choose between childcare and work. Low-income families have to choose work to provide for their families. As is the case in the USA, the private sector has been the major beneficiary of the increasing number of women returning to work (Ball & Vincent, 2005). Women have to return to work to provide for their children normal standards of living.

At this point, it is worth mentioning the fact that costs of childcare keep rising steadily. The own-price elasticity of childcare is sensitive to differing identifying assumptions in the estimation of childcare price equations and sample selection. Based on the mixed logit model, the own-price elasticities for center, sitter, and relative care are -1.3961, – 3.6003, and – 0.8032, respectively (Powell, 2002). In fact, parents cannot always cover costs of childcare.

In such a situation, single mothers are in a particularly difficult position and they have to work hard to provide for their families. Working mothers who use center or sitter care earn on average higher wages ($13.50 and $12.86, respectively) compared with mothers who use a relative or spouse as the primary mode of care (these mothers earn average wages of $10.24 and $10.98, respectively) (Powell, 2002). Therefore, hard work is the only way-out for low-income families and single mothers.

Low-income single mothers also report being more likely to work when care is more available and when they are more satisfied with the quality of care. Problems with child care can lead single mothers to leave jobs and also can adversely affect attendance, work hours, and career advancement (Danziger, 2004). In such a situation, low-income single mothers and low-income families still face difficulties with the full coverage of childcare costs.

Government policies to support child care

As costs of childcare are high and parents have to work hard to afford childcare costs, the government support becomes a key to the effective childcare. The federal government and states have greatly expanded spending on child care since the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was enacted in August 1996. The act consolidated federal funding into a child care and development block grant (CCDBG); $20 billion was allocated for the period 1997-2002, reflecting a 25% increase (an additional $4 billion) over the spending provided under prior legislation (Danziger, 2004). The steadily increasing federal funding helps many families but it is still insufficient.

At this point, it is possible to distinguish family and group childcare. Family and group childcare both operate in private residences, but family childcare homes care for <6 children at any one time and need only register by attesting to meeting state regulations, providing personal references, and being cleared for criminal records, child protective services, and tuberculosis (Danziger, 2004). The government attempts to support low-income families and single mothers to help them to cover costs of childcare.

Assistance from the part of the state is very important

The government attempts to provide low-income families and single mothers with support to help them to cover childcare costs. In order to facilitate the transition from welfare to work and help low-income families maintain economic self-sufficiency, the new law streamlined the childcare assistance system by consolidating four main childcare subsidy programs into a single block grant, the Child Care Development Fund (CCDF) (Tekin, 2007). Under the new law, states are given unprecedented flexibility to design and implement their own childcare assistance program (Tekin, 2007). In such a way, the new law can contribute to the increase of the federal government support of low-income families and single mothers. The government attempts to conduct responsible policies in relation to low-income families and single mothers, who cannot provide effective childcare because of its high costs.

In actuality, total CCDF expenditures rose by 84 percent, from about $4.4 billion to about $8.1 billion, between 1997 and 2001. In 2003, total expenditures from federal and state funds reached around $9.3 billion, which served approximately 1.75 million children on average every month (Tekin, 2007). Therefore, the government program tends to increase the government support of low-income families and single mothers.v

In addition, some states, such as Michigan provide subsidies for low-income families to help them to afford childcare. Income-eligible families must pay a portion of their child care costs, from 5% to 70%, based upon the type of care selected, the area in which the care is used, and the age of the child. The percentage paid by the state is based upon the predetermined state maximum rate or the provider’s charge, whichever is less (Danziger, 2004). For the lowest-income families, the state will pay 95% of either the cost of care or the maximum (Danziger, 2004). In fact, low-income families cannot afford costs of childcare and the government support is essential at both federal and state level.

At this point, it is worth mentioning the fact that costs of childcare keep rising and low-income families and single mothers need the larger government support. However, the government support is not always enough and they have to work hard. In this regard, the support of low-income families and single mothers from the part of NGOs and public organizations can help many families to cover childcare costs.

Conclusion

Thus, taking into account all above mentioned, it is important to place emphasis on the fact that, today, costs of childcare keep rising. In such a situation, low-income families and single mothers are in a particularly difficult position because they cannot afford costs of childcare. In this regard, education and health care services become virtually unaffordable for many parents that put the life and future of children under a threat. The government attempts to introduce government-funded programs that help low-income families and single mothers to cover costs of childcare. At the same time, parents and single mothers have to work to increase their earnings to cover costs of childcare. In such a situation, they cannot count on the government support only. Instead, they need to work and to use the government support to cover costs of childcare.

References:

Ball, S.J. and C. Vincent. (Oct., 2005). “The ‘Childcare Champion’? New Labour, Social Justice and the Childcare Market,” British Educational Research Journal, 31(5), Education Policy and Social Justice, pp. 557-570.
Childcare in America. (2010). Retrieved on February 4, 2012 from http://www.ks.childcareaware.org/PDFs/Childcare_America_2010.pdf
Danziger, S.K. et al. (Mar., 2004). “Childcare Subsidies and the Transition from Welfare to Work,” Family Relations, 53(2), Special Issue on Low-Income and Working-Poor Families, pp. 219-228.
Powell, P.M. (2002). “Joint Labor Supply and Childcare Choice Decisions of Married Mothers,” The Journal of Human Resources, 37(1), pp. 106-128.
Tekin, E. (Spring, 2007). “Childcare Subsidies, Wages, and Employment of Single Mothers,” The Journal of Human Resources, 42(2), pp. 453-487.