Childcare costs are placing a significant burden on U.S. families, and data now shows that these affordability pressures are affecting the nation’s labor force. According to The Care Board, a project of the University of Kansas Institute for Policy & Social Research, mothers experienced the sharpest January–June decline in labor force participation (2.8 percentage points) in more than 40 years. Fathers’ participation remains steady above 95%, suggesting that the impact is both gendered and systemic. Mothers of children under five are the most likely among prime-age adults to cite childcare barriers as the main reason for being out of the labor force, working part-time, or missing workdays.
A separate Care.com study, the 2025 Cost of Care Report, further illustrates how childcare affordability challenges influence workforce participation. Their data reveals that families now devote an average of 22% of household income to childcare – more than three times the U.S. Department of Health and Human Services’ affordability benchmark of 7%. As a result, 89% of parents report making major work or lifestyle changes to manage expenses, including one in four taking on additional jobs and 7% - disproportionately mothers – leaving the workforce altogether. On average, parents deplete 29% of their savings to cover care costs, indicating that affordability pressures extend beyond monthly budgets to longer-term financial stability.
Geographic data reinforces the scope of the challenge. The Economic Policy Institute, a U.S.-based think tank that focuses on economic research and policy, finds that in no U.S. state is infant care affordable for a median-income family. Even in South Dakota – the least costly state – care consumes 9.4% of income, still above the federal affordability threshold. In New Mexico, it absorbs 21%, and in 38 states and the District of Columbia, the annual cost of infant care now exceeds in-state college tuition.
The result is a national affordability–participation paradox: families cannot afford to work without childcare, yet cannot afford childcare in order to work. This loop constrains overall labor force participation, limits economic growth, and deepens gender disparities in earnings and advancement.
For employers, rising childcare costs create tangible business challenges: increased absenteeism, lower productivity, and higher turnover, especially among prime-earning women. Ensuring access to affordable care is therefore not just a social concern, it is a strategic workforce imperative, directly influencing talent retention, operational efficiency, and the long-term resilience of the organization’s labor force.
Sources: thecareboard.ku.edu; care.com; epi.org