Child Care Affordability Is Out of Reach for Many Low-Income Hispanic Households

Authors:

Danielle A. Crosby,

Julia L. Mendez,

Amanda Barnes

Publication Date:

October 15, 2019

Hispanic households tend to have both high levels of parental employment and low levels of income, making access to good-quality child care a critical need for these families. Child care has the potential to serve as a two-generation investment strategy, with both short- and long- term economic and social benefits, by supporting parents’ ability to work and providing enrichment opportunities for children.

Affordability is a key factor shaping families’ access to care. Even when communities have an adequate supply of good-quality child care that meets parents’ and children’s needs and families are aware of these options, care remains inaccessible if costs are beyond household budgets. The U.S. Department of Health and Human Services (HHS) recommends that child care be considered affordable if family out-of-pocket costs are equivalent to 7 percent or less of total household income. Yet in every state in the nation, the average price of formal child care (e.g., centers and licensed or regulated family child care) exceeds this recommended benchmark of affordability.

To reduce financial barriers and support more equitable access, several federal and state programs provide low-income families with no- or low-cost early care and education (ECE) options, including Head Start, public pre-kindergarten, and subsidies through the Child Care and Development Fund (CCDF). While the reach of these programs has expanded over the years, funding constraints mean that not all eligible children can be served. In the absence of such programs or when co-payments are high, low-income families are often priced out of the formal, licensed care settings that tend to be more stable and of higher quality than more informal arrangements.

Affordability and its role in equitable access to good-quality care are key issues for low-income Hispanic families. Employed Latino and black parents are much more likely to have low incomes than working parents who are white or Asian/Pacific Islander, even at similar levels of employment, and are therefore likely to be disproportionately affected by affordability issues. Indeed, Latino parents of young children who report difficulty finding child care are more likely to identify cost as the primary barrier.

This brief examines child care costs and affordability for low-income Hispanic households with at least one child ages 0 to 5, the period in which families’ care needs tend to be most acute. Given that care is often needed for older children as well, to cover gaps between school and parents’ work schedules, our household-level analysis of child care spending includes all arrangements for children younger than age 13 who live in the home. Using nationally representative data from the 2012 National Survey of Early Care and Education (NSECE), we report on Hispanic households’ weekly out-of-pocket child care costs, and the percentage of household income this represents. We examine costs separately for immigrant and nonimmigrant Hispanic households given evidence that some aspects of care access and utilization (including receipt of subsidies) vary by parents’ nativity status. For comparison purposes, we also report cost data for low-income non-Hispanic, nonimmigrant, and white and black households. Finally, to better understand associations between costs and utilization for Latinos, we examine the amounts and types of care being used by Hispanic households with three different levels of child care spending: those with no out-of-pocket costs, those paying affordable costs (≤ 7% of income), and those with high costs (> 7% of income).

Key Findings

  • About 6 in 10 low-income Hispanic households with young children using child care have no out-of-pocket expenses because they use arrangements that are either provided at no cost or are fully subsidized. This is similar to the shares of low-income white and black households with no out-of-pocket expenses.
  • Four in 10 low-income Hispanic households using child care have some out-of-pocket costs, and most of these families spend a significant proportion of their income on child care. The difference in costs for families below and above the federal benchmark of affordability (≤ 7% of total family income) is striking:
    • More than three in 10 low-income Latino households using care face high out-of-pocket costs. These households spend an average of roughly $115 per week on care, which represents about one-third of their income.
    • Fewer than one in 10 low-income Latino households using care have out-of-pocket costs that are considered affordable according to the federal benchmark. These households spend an average of approximately $20 per week on care, which represents 3 percent of their income.
  • Child care utilization patterns for low-income Hispanic households with different levels of child care spending—either no costs, affordable costs, or high costs—look similar on some characteristics, but differ on others.
    • Households across all three spending levels use an average of more than two regular providers and approximately 30 to 40 hours of care per week.
    • Compared to households that pay out of pocket for care, households with no out-of-pocket costs tend to:
      • Use fewer hours of care and slightly fewer providers
      • Be less likely to use center-based arrangements
      • Be more likely to use unpaid care with a home-based provider
    • Within each spending level, immigrant and nonimmigrant Hispanic households have similar utilization patterns, with a few exceptions:
      • Among those with no out-of-pocket costs, immigrant households are twice as likely to use center-based arrangements as nonimmigrant households (45% vs. 26%).
      • Immigrant households with no out-of-pocket costs are also less likely than their nonimmigrant counterparts to use unpaid home-based arrangements (56% vs. 69%).

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