National Childcare Cost Trends 2018–2026

Year-by-Year Cost Data: 2018–2025

Data reflects national averages for center-based care (licensed daycare centers, not family home providers). Infant care = age 0–12 months. Toddler = 12–30 months. Preschool = 30–60 months.

Sources: NDCP Annual Childcare Cost Reports, BLS Consumer Expenditure Survey, EPI Child Care Cost Index.

Pre-COVID Trend (2018–2019): Steady Upward Pressure

Childcare costs were already rising faster than general inflation before the pandemic. The 2018–2019 increase of 5.2% for infant care reflected three independent pressures building simultaneously:

• Minimum wage increases: Between 2017 and 2019, 29 states raised their minimum wage. Childcare workers at the bottom of the wage scale saw immediate increases; centers passed costs through.
• Teacher shortages: Childcare worker wages had historically lagged even retail and food service. The tight 2018–2019 labor market forced centers to compete for staff more aggressively.
• Commercial real estate: Urban center rents increased 6–12% in major metros from 2017–2019, a period of exceptional commercial real estate appreciation.

The NDCP's 2019 report noted that in 33 states, full-time infant care already exceeded the annual cost of in-state college tuition. This figure, widely covered in media, reflected a pre-pandemic baseline that was already untenable for many families.

COVID's Counterintuitive Impact (2020): The Pause Before the Storm

2020 produced the smallest annual cost increase in the 2018–2025 period: just 1.9% for infant care. This seems counterintuitive — costs rose during a crisis that shuttered thousands of centers — but the mechanism is clear.

In spring 2020, roughly 60% of licensed childcare centers closed temporarily (NDCP Emergency Impacts Survey, 2020). Centers that remained open served essential workers and often froze or reduced fees to retain customers. Federal relief through the CARES Act ($3.5B in childcare-specific funds) kept many centers solvent without requiring price increases. Federal relief masked the underlying cost pressure building in the system.

The Post-COVID Surge (2021–2022): The Real Reckoning

The 2021–2022 period produced the sharpest childcare cost increases in modern data. Infant care rose 6.5% in 2021 and another 9.7% in 2022 — the latter being the largest single-year jump since the NDCP began tracking.

Three compounding factors drove this surge simultaneously, and they reinforced each other in ways that made a return to pre-2020 pricing impossible:

1. Workforce Crisis and Wage Pressure

Centers reopening in 2021 found that their former staff had left. Retail, warehousing, and food service had aggressively recruited during the pandemic — offering wages comparable to childcare ($12–16/hour) without the credential requirements or emotional labor. Centers that had previously paid $11/hour were now competing with Amazon at $15/hour and McDonald's at $13–15/hour for the same labor pool.

The result: childcare worker wages increased 12–18% from 2020 to 2022 in most major markets (BLS Occupational Employment Statistics). Since staff accounts for 65–80% of a center's operating costs, these wage increases flowed directly to parent fees.

2. Supply Destruction

An estimated 9,000–11,000 childcare programs closed permanently during 2020–2021 (NDCP Provider Impact Survey, 2021). Many were small family home providers, but a meaningful share were licensed centers. Surviving centers were not running at full capacity — staff shortages forced enrollment caps even when physical space and regulatory ratios would have permitted more children. Demand concentrated in fewer providers; prices rose accordingly.

3. Operating Cost Inflation

The 2021–2022 general inflation surge hit childcare centers in categories that were particularly acute: food costs (snacks and meals are a regulatory requirement), cleaning supplies, liability insurance premiums, and utilities. Centers running on 3–5% operating margins had no buffer — cost increases went straight to rates.

The Slowdown (2023–2025): Prices Plateau at a Higher Floor

Annual cost increases moderated in 2023 and 2024 — from 9.7% in 2022 to 4.8% in 2023 and 2.9% in 2024. This looks like relief, but it isn't a return to pre-pandemic trends. It's a higher floor.

The workforce situation has partially stabilized: childcare worker wages remain elevated but are no longer rising at the breakneck 2021–2022 pace. Centers that survived have adjusted their cost structures and are not absorbing new one-time shocks. But the underlying economics — high staff ratios, licensing costs, urban real estate — have not changed.

The expiration of American Rescue Plan Act (ARPA) childcare stabilization grants in September 2023 created a sector-wide risk. These grants — $24B over three years — had covered operational costs for thousands of providers. The NDCP estimated that without them, 70,000 childcare slots could be lost. In practice, closures were less catastrophic than feared, but the grant cliff drove 3–4% fee increases at many centers that had held prices flat during the grant period.

What to Expect in 2026

Several indicators suggest costs will continue rising at 3–5% annually:

• Minimum wage floors: 20+ states have scheduled minimum wage increases for 2025–2026. Childcare workers at the bottom of center pay scales will see direct wage increases; centers will absorb this into fees.
• No new federal relief: The ARPA grant program has ended. No comparable federal childcare investment is in the current budget pipeline. State-level funding varies dramatically.
• Persistent workforce gaps: The childcare workforce remains 5–8% below 2019 levels nationally. This keeps centers from expanding supply to meet demand, sustaining pricing power for existing providers.
• Infrastructure costs: Centers built in the 2000s and 2010s are facing deferred maintenance, HVAC replacements, and ADA upgrades — costs that owners cannot absorb and will pass through.

For a family with an infant born in 2026, budgeting for childcare costs to reach $15,500–$16,000/year nationally by 2028 is a reasonable planning assumption if current trends hold.

How Much Has Childcare Risen vs. Everything Else?

From 2018 to 2025, national CPI rose approximately 29.4%. National average infant care costs rose 37.5% — 8 percentage points faster. This gap compounds: a family that was paying $10,480 in 2018 has seen their costs rise $3,928 more than general inflation would predict.

For context, median household wages rose approximately 25–28% over the same period. Childcare costs have risen faster than wages and faster than inflation, which means the burden on family budgets has structurally increased regardless of how you measure it.

See the deeper analysis in our childcare inflation vs. CPI comparison.

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