New CEA analysis shows that American Rescue Plan support for child care helped lower child care costs for a typical family with young children by over $1,200 per child per year

President Biden and Vice President Harris know that children, their parents, and the economy are all made stronger through accessible, affordable, high-quality child care. That’s why from day one, the Biden-Harris Administration has focused on ways to lower child care costs for hardworking families and improve wages for child care workers.

The American Rescue Plan’s (ARP) Child Care Stabilization program delivered historic support to over 225,000 child care programs serving as many as 10 million children across the country, helping keep their doors open for millions of working families who rely on them. A new report released by the President’s Council of Economic Advisers (CEA) provides evidence of this critical support:

Saved families with young children who rely on paid child care approximately $1,250 per child per year by slowing the rise of child care prices.
Helped hundreds of thousands of women with young children enter or re-enter the workforce more quickly, increasing the labor force participation and employment of mothers of young children by an additional 3 percentage points.
Boosted the child care workforce and helped raise the real wages of child care workers, increasing the availability and reliability of child care options and ensuring the workers who take care of our children receive fairer pay.

Taken together, these investments had a benefit-cost ratio of about 2:1, meaning the benefits of these funds for the broader economy outweighed the costs of the investment.

With the end of the Child Care Stabilization program this fall, evidence of the Child Care Stabilization program’s success makes clear the need for Congress to deliver further investment in the child care sector.

The President and Vice President have called on Congress to provide an additional year of child care stabilization funding to help ensure that child care providers can remain afloat. At the same time, the President and Vice President have called for sustained, transformative investments to ensure that all families can access affordable, high-quality child care and all child care workers are compensated in a way that reflects their value.

As the Department of Treasury made clear in their 2021 report on the economics of child care supply in the U.S., the child care sector is a crucial part of the American economy that suffers from chronic underinvestment, hindering parents’ ability to contribute to our economy and make a solid living. Simply returning to the pre-pandemic status quo will hurt families and our economic potential.

Today, the Department of Health and Human Services is also releasing new data on the ARP Child Care Stabilization program showing its broad reach in helping providers in every corner of the country:

All 50 states, Washington, D.C., and four US territories operated Child Care Stabilization programs. Nationwide, providers in over 96% of counties received aid.
More than 8 in 10 licensed child care centers nationwide received assistance.
About 30,000 child care programs in rural counties received aid, helping small businesses and families in some of the places where child care was already difficult to come by even prior to the pandemic.
Assistance was provided to child care providers in 98% of persistent poverty counties in most states. These are counties where at least 20% of residents have lived in poverty over the past 30 years.
Over 44% of programs that received assistance were owned or operated by people of color.
53% of providers receiving stabilization funds were operating in the most racially diverse counties.

The Child Care Stabilization program was critical to helping child care centers and family child care providers, which are mostly very small women-owned businesses, remain open or reopen and keep the child care workforce, disproportionately women of color, on the payroll. Roughly 87 percent of child care centers reported using stabilization funds to help pay personnel costs and keep programs staffed while roughly 87 percent of family child care programs – typically very small businesses operating out of a home – reported using stabilization funds to help cover rent or mortgage payments, usually their largest operating expense.

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