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Family Expenditures on Child Care

Author

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  • Rosenbaum Dan T

    (University of North Carolina, Greensboro)

  • Ruhm Christopher J

    (University of North Carolina, Greensboro)

Abstract

This study examines the child care "expenditure share," defined as child care expenses divided by after-tax income. We estimate that the average child under six years of age lives in a family that spends 4.9 percent of after-tax income on child care. However, this conceals wide variation: 63 percent of such children reside in families with no child care expenses and 10 percent are in families where the expenditure share exceeds 16 percent. The proportion of income devoted to child care is typically greater in single-parent than married-couple families but is not systematically related to a constructed measure of socioeconomic status. One reason for this is that disadvantaged families use lower cost modes and pay less per hour for given types of care. The expenditure share would be much less equal without low cost (presumably subsidized) formal care focused on needy families, as well as government tax and transfer policies that redistribute income towards them.

Suggested Citation

  • Rosenbaum Dan T & Ruhm Christopher J, 2007. "Family Expenditures on Child Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-32, July.
    • Handle: RePEc:bpj:bejeap:v:7:y:2007:i:1:n:34
    DOI: 10.2202/1935-1682.1682
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    Cited by:

    1. Herbst, Chris M., 2018. "The rising cost of child care in the United States: A reassessment of the evidence," Economics of Education Review, Elsevier, vol. 64(C), pages 13-30.
    2. Herbst, Chris M., 2015. "The Rising Cost of Child Care in the United States: A Reassessment of the Evidence," IZA Discussion Papers 9072, Institute of Labor Economics (IZA).
    3. Hori, Masahiro, 2011. "The expenditure on children in Japan," CIS Discussion paper series 527, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    4. Wen-Jui Han & Christopher Ruhm & Jane Waldfogel & Elizabeth Washbrook, 2009. "Public Policies and Women's Employment after Childbearing," NBER Working Papers 14660, National Bureau of Economic Research, Inc.
    5. Ruhm, Christopher J., 2008. "Maternal employment and adolescent development," Labour Economics, Elsevier, vol. 15(5), pages 958-983, October.

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