New Report Finds U.S. Child Care System Is Failing and Economists Say It’s Time for Bold Action

Arlington, VA—A new report released today by Child Care Aware® of America and the Buffett Early Childhood Institute at the University of Nebraska reveals that America’s child care system is failing families, providers, and the economy, but notably, this call for change is no longer coming just from parents and those inside the child care field. 

The report, Economics & Child Care: Where Are We Now—and Where Do We Go? reflects the findings of an October 2024 national roundtable in Omaha. Setting this effort apart is the 20-person convening, and subsequent recommendations, which were dominated by leading economists, labor market experts, and policy analysts. Their conclusion was clear: the benefits child care gives families, businesses, and our broader economy demand a new level of public investment, grounded in data, economic modeling, and long-term impact. There was total agreement in two areas: the need for additional data on many aspects of child care; and a lack of clear definitions and measurements of quality across the spectrum.

“This is not only a conversation about early childhood education,” said Walter Gilliam, Executive Director of the Buffett Early Childhood Institute at the University of Nebraska. “It’s about economic growth, workforce participation, and the foundational role child care plays in our national infrastructure.”

“The data and the economics are clear: parents can’t afford to pay more, providers can’t afford to earn less, and children can’t afford to wait,” said Susan Gale Perry, Chief Executive Officer at Child Care Aware of America. “Child care is essential infrastructure, and treating it as anything less is a disservice to our workforce, our communities, and our country’s future. Investing in child care pays off.”

Key Findings 

• The current system is unsustainable. Families face costs that far exceed what is considered affordable. Providers are leaving the field due to low pay and burnout.  

• Traditional affordability metrics are misleading. The commonly cited “7% of income” benchmark doesn't reflect real-world costs or family budgets. 

• Investment strategies must address supply and demand. The report rejects the idea that loosening regulations (like raising child-to-staff ratios) will solve the crisis, arguing instead for investment strategies that grow available slots and help parents find and afford child care. 

• Shared responsibility is essential. Economists agreed that child care benefits parents, businesses, and the broader economy, so cost-sharing among federal, state, local, and private entities is critical. 

“What’s new here is who’s talking and making these recommendations,” said Linda Smith, Director of Policy at the Buffett Early Childhood Institute. “Economists are making the case that the failure to address child care isn’t just hurting families, it’s limiting our nation's economic potential. When the people who understand markets and modeling are saying the market alone can't solve child care, it's time for comprehensive and multifaceted solutions. This is no longer a niche issue. It's an economic imperative.”

The report outlines five persistent barriers to reform, affordability, quality, regulation, supply, and financing, and offers pathways to build a child care system that reflects the needs of today’s families and labor market.

About the Roundtable

The Roundtable on Economics and Child Care was co-hosted by Child Care Aware® of America and the Buffett Early Childhood Institute. It brought together economists, researchers, and policy experts from across the country for a landmark discussion on the future of child care in America.

Participants

• Anubhav Bagley, Consultant, Arth Analytics 
• Brittany Birken, Director and Principal Adviser, Community and Economic Development, Federal Reserve Bank of Atlanta 
• Eliot Brenner, Executive Director and Trustee, Klingenstein Philanthropies 
• Marica Cox Mitchell, Chief Program Officer, Early Childhood, Bainum Family Foundation 
• Flávio Cunha, Ervin K. Zingler Chair and Professor of Economics, Rice University 
• Rupa Datta, Vice President and Distinguished Senior Fellow, NORC at the University of Chicago 
• Elizabeth Davis, Professor of Applied Economics, University of Minnesota 
• Jason Fichtner, Senior Fellow, Bipartisan Policy Center 
• Chloe Gibbs, Assistant Professor of Economics, University of Notre Dame 
• Rob Grunewald, Economics and Public Policy Consultant, Rob Grunewald Consulting LLC 
• Theresa Hawley, Executive Director, Center for Early Learning Funding Equity at NIU 
• Chris Herbst, ASU Foundation Professor, School of Public Affairs, Arizona State University 
• Rebecca Jack, Ph.D. Candidate in Economics, University of Nebraska-Lincoln 
• Lynn Karoly, Senior Economist and Professor of Policy Analysis, RAND 
• Herman Knopf, Senior Research Scientist, Anita Zucker Center for Excellence in Early Childhood Studies, University of Florida 
• Susan Longworth, Policy Advisor, Community and Economic Development, Federal Reserve Bank of Chicago 
• Taryn Morrissey, Professor and Associate Dean of Research, American University School of Public Affairs 
• Aaron Sojourner, Senior Economist, W.E. Upjohn Institute for Employment Research 
• Claire Taylor, Director of Analytics, KRC Research 
• Brenden Timpe, Assistant Professor of Economics, University of Nebraska-Lincoln 

Download the Report 

Read the full report: Economics & Child Care: Where Are We Now and Where Do We Go?