A recent study reveals that U.S. childcare costs significantly outpace those of other developed nations, particularly for single parents and dual-income couples earning average wages, according to Statista. The burden of childcare expenses in the U.S. is notably higher than in most OECD countries. Only Switzerland, the United Kingdom, and New Zealand come close to matching the high costs faced by American parents.
A 2022 OECD report revealed a stark reality: the U.S. has the highest childcare costs among developed nations. For American couples with two young children, both working full-time, childcare can consume a staggering 20% of their disposable income. Single parents face an even greater burden, with childcare costs amounting to 37% of their disposable income.
A Global Comparison
In comparison, Switzerland, the second most expensive country, sees couples with two children spending 32% of their disposable income on childcare. However, single parents in Switzerland benefit from more favorable policies, reducing their childcare costs to 18%.
This disparity is largely due to the U.S.’s heavy reliance on the private market for childcare. Unlike many other developed countries, the U.S. lacks significant government subsidies or regulations for childcare, leading to inflated costs. Treasury Secretary Janet Yellen has aptly described the U.S. childcare system as a “broken market.”
How the Anglophone Nations Compare
Many English-speaking nations, including the U.S., Canada, Ireland, New Zealand, and Australia, face significant challenges with high childcare costs. In 2022, U.S. couples with two young children working full-time had to allocate a substantial 20% of their disposable income to childcare, while single parents faced an even higher burden of 37%.
While Canada also grapples with high childcare costs, at 19% of disposable income for couples, the government has recently implemented reforms to alleviate the financial burden. However, many English-speaking nations, due to later adoption of regulated and subsidized childcare systems, continue to lag behind in affordability, especially compared to countries with more established early childhood education and care systems.
Outside of the English-speaking world, the Netherlands, heavily reliant on the private childcare market, emerges as another country with high childcare costs. Couples with two children in the Netherlands spend 19% of their disposable income on childcare, while single parents face a cost of 18%.
The Situation in Europe
In many European countries, parents enjoy significantly lower childcare costs, often spending just a few percent of their disposable income. This is largely due to government subsidies and regulations that support both public and private childcare providers.
For instance, in France, working parents with average incomes spend between 6% and 10% of their disposable income on childcare. In Germany, the cost is even lower, often as low as 1% due to government-subsidized childcare vouchers. Some countries, such as Italy, Latvia, Bulgaria, and Malta, offer free childcare altogether.
Single parents in many European countries also benefit from reduced or waived childcare costs. In Greece, single parents pay no fees, while in Canada, the UK, and Japan, various subsidies and benefits can significantly reduce the financial burden.
Here are the rankings of the share of disposable income households spent on childcare in selected countries in 2022 (represented as a percentage).
US
- Single with two children: 37%
- Couple with two children: 20%
Great Britain
- Single with two children: 20%
- Couple with two children: 16%
China
- Single with two children: 32%
- Couple with two children: 18%
Czech Republic
- Single with two children: 18%
- Couple with two children: 10%
New Zealand
- Single with two children: 23%
- Couple with two children: 17%
Netherlands
- Single with two children: 19%
- Couple with two children: 14%
France
- Single with two children: 10%
- Couple with two children: 6%
Canada
- Single with two children: 19%
- Couple with two children: 5%
South Korea
- Single with two children: 5%
- Couple with two children: 3%
Germany
- Single with two children: 1%
- Couple with two children: 1%
Methodology
Data taken from Statista.com. Represented are full-time working parents earning average wages with children aged two and three. Note that eligibility for a UK rent supplement can lower costs for single parents to 5%.
This article was produced and syndicated by MediaFeed.org.
