Arlington, VA is the Most Expensive Place in the U.S. For Child Care. These Policies Might Help.

This story is a part of our Ask a Professor series, in which Georgetown faculty members break down complex issues and use their research to inform trending conversations, from the latest pop culture hits to research breakthroughs and critical global events shaping our world.

Virginia's Arlington County is the most expensive place in the U.S. for daycare.

William Gormley is university professor emeritus at the McCourt School of Public Policy who has authored multiple books on children and public policy.

In a recent report, the Wall Street Journal reported that the median cost for five years of child care - from infancy through preschool - is nearly $147,000 in Arlington, located in the Washington, DC, metropolitan region.

Meanwhile, other cities with high costs of living have significantly lower child care costs. In DC, child care is under $126,000, while it costs under $80,000 in Manhattan.

William Gormley, university professor emeritus at the McCourt School of Public Policy, said he was surprised but not shocked at the cost of child care in Arlington. Gormley is an expert on early childhood education policy and the co-director of the Center for Research on Children in the U.S. (CROCUS).

"Child care affordability is a problem that's worsened in recent years," Gormley said. "Child care costs are high everywhere, but especially in communities with a relatively prosperous and well-educated citizenry."

We asked Gormley the reasons behind rising daycare costs and what policies would help make child care more affordable for families.

Ask a Professor: What Can Help Lower the Cost of Child Care in the U.S.?

Why is child care in Arlington County so expensive?

The cost of child care in Arlington is high partly because the cost of just about everything is high in northern Virginia - especially housing and commercial real estate. That drives up fixed costs for child care providers, which drives up the fees they have to charge.

The other big driver of high child care costs is the education level of the workforce. Arlington County ranks #2 in the nation in the education level of its citizens. A whopping 79% of Arlington adults have a bachelor's degree or more.

Even in a tight job market, few Arlington residents are likely to consider a career in child care. In terms of average pay, it ranks below approximately 97% of all professions. To be sure, there are intangible rewards - the joy of working with young children, the knowledge that you're providing a really valuable service to kids and their parents. Some well-educated, well-motivated individuals choose to become early childhood educators. Kudos to them! But generally, those with a college degree look elsewhere for jobs.

Why is childcare significantly less expensive in Washington, DC, and Manhattan, which are otherwise among the most expensive U.S. cities to live in?

The child care situation in Washington, DC, is considerably better for parents because the DC city government has a longstanding universal pre-K program. Under that program, DC residents can send their 3-year-olds and 4-year-olds to a high-quality, city-funded pre-K program, often in their immediate neighborhood. And it's free! That drives down costs dramatically for two years and is likely to produce great results for kids.

In New York City, then-Mayor Bill de Blasio established a universal pre-K program in 2014. As of 2023, 63% of New York City's 4-year-olds were enrolled in that program. The current mayor, Eric Adams, recently approved an $80 million allocation to child care, focusing especially on special education students, infants and toddlers. These kinds of bold initiatives substantially reduce the child care burden to parents.

In short, economic conditions and demographic characteristics matter. But public policies matter as well. When Tim Kaine was the governor of Virginia, he strongly advocated universal pre-K. Unfortunately, the Virginia General Assembly did not approve that initiative, though it did authorize some additional funding for pre-K.

You mention that child care providers earn low wages, and yet parents pay a lot for child care. What's going on?

Nationwide, the average annual child care wage is $34,000 for full-time care. That's pretty low. And wages account for a significant share of child care costs. But in the U.S. (unlike Europe, for example), parents must shoulder 70% of the total costs of child care (in Europe, parents are responsible for only 30% of child care costs). The U.S. approach imposes a significant burden on young folks who are just starting out in life, who may be paying off a student loan, who are struggling to pay high housing costs and whose earnings are typically lower than those of older citizens.

In Arlington County, the situation is a bit different. The average annual child care wage there is somewhat higher than the national average, though estimates vary widely. In principle, you might say: Well, shouldn't that lead to more, better child care options for parents? The answer is: The relatively high child care wage, compared to other communities, is still considerably lower than the wage for other professions that highly-educated workers can choose from. So, in Arlington County, the somewhat higher wages are high enough to create a considerable parent payment burden but not high enough to solve an acute shortage of child care slots. In some ways, it is the worst of both worlds.

Child care is one of those economic sectors where supply and demand are out of sync. Child care workers definitely deserve higher pay, but parents definitely can't pay them what they deserve. It's a classic case of market failure. And that's precisely the sort of situation where government has an important role to play.

What can be done to increase the supply of child care providers and draw more workers to this field?

Very few states have figured out a way to solve this problem, but many have figured out ways to ameliorate the problem. Years ago, North Carolina established a pilot program called T.E.A.C.H., where the state subsidizes community college enrollment for child care and early childhood education workers. They get 80 to 90% of tuition and book costs covered while they are gainfully employed as child care workers. The additional coursework they take increases their market value and yields higher salaries, which facilitates recruitment and retention. At the same time, it improves the quality of child care for the children they teach. It's a win-win. The T.E.A.C.H. program has spread to a total of 23 states.

A different kind of solution would be to get more men to seriously consider child care as a career. At the moment, approximately 94% of child care workers are women. Why should that be? Increasingly, men in our society are doing more as dads than they did a generation or two ago. The time has come to change the gender balance in our day care centers and preschool programs as well. I'm not proposing fewer women, just more men. That requires us to change some attitudes and norms about gender roles. But it would help alleviate the child care supply problem. It's a change that's long overdue.

What role do the federal and state governments play in shaping the cost of child care?

When it comes to child care, our government is not exactly missing in action, but it is far less involved in supporting parents with young children than, for example, governments in Europe.

Congress established the federal Head Start program for disadvantaged kids in 1965, and in 1990, Congress established the Child Care Development Block Grant (CCDBG) program, which provides child care subsidies to some parents. The CCDBG program is a great idea, but it doesn't cover everyone and is poorly funded. If you make more than 85% of your state's median family income, you are ineligible.. If you qualify, the odds are that you still won't get funded, as only 15% of those who qualify for the CCDBG child care subsidies actually get those benefits.

So, if Congress really wants to make child care more affordable, why not fund a much higher percentage of those who are theoretically eligible for the CCDBG program?

At the state level, the government's focus has been more on child care quality than on child care affordability or availability. Our state governments determine the quality standards for day care centers, preschools and family day care homes. State governments do provide some child care funding, under what's called a "maintenance of effort" clause in the CCDBG legislation. That keeps them in the game.

But few states have been generous in their child care subsidies. One bright spot is that several states have established universal pre-K programs for 4-year-olds. Our research at the Center for Research on Children in the U.S.shows that Tulsa, Oklahoma's, universal pre-K yields big cognitive gains in the short run and higher college enrollment rates in the long run. The benefit/cost ratio is 2.65 to 1, which means that the long-term benefits to society that flow from the higher earnings of pre-K alumni exceed the short-term costs to taxpayers by a substantial amount. That's definitely something states should consider.

How do local government policies influence child care costs?

Our local governments, seldom flush with cash, are not the best bets for lowering the costs of child care. But they could take steps to increase the supply of family day care homes.

Family day care homes are an important piece of the child care puzzle because they typically provide infant and toddler care, usually the most expensive and least available form of child care. Local governments sometimes make matters more challenging by imposing costly occupancy permit requirements and inspection requirements on family day care homes.

These costs aren't huge, but they're big enough to discourage most family day care homes from getting licensed or registered. As a result, about 85% of all family day care homes are part of the underground economy.

That needs to change. The best way to do that would be for local governments to waive these requirements or to defray these expenses. Parents can't utilize family day care homes unless they know where to find them. We need to bring family day care homes out of the darkness and into the mainstream of child care services.