U.S. child care shortage costs economy $172 billion annually

The United States faces a child care crisis estimated to cost the economy $172 billion annually in lost tax revenue, productivity, and earnings. While much focus remains on affordability, there is a critical shortage in the physical supply of licensed child care facilities and classrooms.

Research indicates that the shortage directly impacts the labor market. A national poll for the First Five Years Fund found that 59% of part-time or non-working parents would return to full-time employment if quality, affordable care were available. Additionally, 52% of voters reported that they or someone they know has missed work shifts or reduced hours due to child care issues.

Industry experts suggest that solving the crisis requires more institutional capital to address the real estate and infrastructure needs of early education operators, who often struggle to find the facilities necessary to meet existing demand.