Too Costly to Work? The Childcare Burden on Household Earnings

November 18, 2025

Brittany Birken Director and Principal Adviser

Summary

This paper explores the cost of childcare for working families with young children by calculating the household percentage of income that families would likely expend on childcare in select high-demand occupations in six high-growth counties in Florida and Georgia. Twelve occupations, including essential and foundational occupations that are important to community development and employment objectives, were examined in each selected geography. Using the median price of childcare and different family compositions, the authors demonstrate substantial childcare affordability challenges for most scenarios included in the analysis. For high-growth metropolitan areas, inadequate childcare affordability may become a constraint on continued economic expansion. If families cannot afford to participate in the workforce because of high childcare costs, or if essential workers relocate to more affordable areas, regional economic growth may be limited by labor supply constraints rather than labor demand. This analysis helps define the level of potential financial burden for working families with young children and can inform strategies that address affordability for working families.

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Discussion Paper 2025-2

JEL Classification: J13, J23, J24, J31

Key words: childcare, human capital, labor force, workforce development

Digital Object Identifier (DOI): https://doi.org/10.29338/dp2025-02

The authors would like to express appreciation to Herman Knopf for lending his expertise and serving as an adviser on the development of this research effort. The authors also thank Pearse Haley for his contributions to our data analysis and Nylah Martinez for her contributions to the literature review. Additionally, we would like to acknowledge Dave Altig, Rachel Spector, and Linda Smith for their excellent comments on earlier drafts of this paper. The authors additionally thank participants of the Miami and Atlanta roundtable discussion for their input, feedback, and comments.

Comments to the corresponding author are welcome at brittany.birken@atl.frb.org.