High child care costs are a financial strain on families and can prevent parents from entering the workforce, further stretching budgets. But the problem is not necessarily a market failure: Child care, in many places, is one of the most heavily regulated economic sectors, driving up costs and limiting new entrants into the field.
The issue has become a hot political topic. New York City’s socialist mayor Zohran Mamdani ran on a platform that included “free” child care. Democrats in many locales have proposed subsidies or other public assistance to help residents cover child care expenses. At the federal level, congressional Republicans last year expanded the Child and Dependent Care Tax Credit as part of President Donald Trump’s tax relief bill.
“However, the problem government officials are addressing is one of their own creation,” J.D. Tuccille wrote for reason.com. “Child care is so expensive largely because government red tape gets in the way.”
That includes barriers to entry that limit competition.
The Archbridge Institute this month released its examination of child care laws in the 50 states. Those “with the most child care freedom and the lowest regulatory burden” got the best marks. The state with the most childcare freedom and the lowest regulatory burden is Idaho (#1), followed by South Carolina (#2), Arizona (#3), Alabama (#4), and Florida (#5); the state with the least childcare freedom and highest regulatory burden is Vermont (#50), preceded by New York (#49), Pennsylvania (#48), Maryland (#47), and Massachusetts (#46).
Among the factors considered were training hours required, education mandates and child-to-staff ratio demands.
Not surprisingly, as Tuccille pointed out, statistics from other sources reveal a correlation between government intervention and high costs. According to a move.org report drawing on data from the Economic Policy Institute and the Census Bureau, families in states with the most child care freedom paid lower costs than their counterparts in high-regulation states. For instance, costs in Idaho were 43% cheaper than in Vermont.
Lawmakers in low-ranking states should look to Arizona and Idaho for tips on how to broaden the pool of child care providers through more reasonable regulation. That could include relaxing zoning codes that inhibit the creation of home-based child care businesses and streamlining licensing requirements that serve as barriers to entry.
Burdensome education demands on child care workers should also be reconsidered, as they are unrelated to the health and safety of children.
Wallet Hub reports that Massachusetts’ child care costs are the 10th-highest in the country. A more hospitable regulatory climate would improve that ranking.
Las Vegas Review-Journal/Tribune News Service
