Explainer: A Healthy Child Care Industry Helps All Granite Staters

This blog is a companion piece to the video A Healthy Child Care Industry Helps All Granite Staters, and includes links, references, and explanations of specific facts and figures in the video.

To learn more about our Child Care work, please visit the Education section for more information.

New Hampshire is a Great Place to Live. But the Beauty of Our State is More Than Just Iconic Landscapes. It’s also in the Strength of Our Families. When Policies are in Place to Support Children, Our Economy Thrives.

A 2023 report from the Urban Institute’s Tax Policy Center suggests investment in public prekindergarten programs for children in families with low incomes may have a return as high as $4.20 for every $1.00 spent on the programs. Longitudinal research suggests attending high-quality early childhood care and education (ECE) contributes to higher educational attainment, higher wages, lower health care costs, and lower likelihood of engagement in criminal activity later in life.

Access to Affordable, High-Quality Child Care Encourages Healthy Development for the Next Generation of Granite Staters.

Key research suggests three- and four-year-olds who receive high-quality ECE have better short- and long-term developmental outcomes, including the potential for enhanced language, literacy, mathematics, and socioemotional skills. Some children demonstrate up to a full year of additional learning from enrollment in high-quality ECE as preschoolers.

It also Helps Parents Pursue their Careers and Support their Families.

In 2021, an analysis from the Bipartisan Policy Center estimated that New Hampshire households collectively lost between $400 million and $600 million in wages due to inadequate child care availability, or approximately $441 million and $661 million in inflation-adjusted 2023 dollars, respectively.

The Average Tuition for a Family with Two Young Kids in Our State is Nearly $32,000 a Year.

The national organization Child Care Aware of America (CCAoA) estimated that New Hampshire families with an infant in center-based child care faced an average annual tuition price of $17,250 in 2023. Preschool tuition in New Hampshire child care centers averaged $14,618, resulting in a combined annual average price of child care for an infant and preschooler of $31,868. This is a 12.5 percent increase from 2022 when tuition for an infant and preschooler in center-based care averaged approximately $28,000 annually. Inflation in New England during this time frame was 2.9 percent.

That's Nearly $2,700 Dollars a Month, More Than What Most Our Residents Pay for Housing or Healthcare.

For many Granite State families with two children under five, $31,868 in annual child  care expenditures will be their single highest annual expense, exceeding housing, food, and health care costs, leaving few household funds available for retirement savings, student loan payments, or emergency expenses.

Although Monthly Tuition is High, Child Care Educators' Wages are Low at a Typical Rate of About $15.50 an Hour. On Top of That, Most Employers can't Afford to Offer them Health Insurance or Retirement Benefits.

In 2023, the median hourly wage for a New Hampshire child care worker was $15.62 an hour. This equates to $32,490 annually, only $2,500 more than the 2023 federal poverty guideline for a family of four, and approximately half of the 2023 median salary for New Hampshire’s kindergarten teachers. New Hampshire’s preschool teachers earned a median annual salary of $37,650 in 2023, which is $2,900 more than retail salespersons, but approximately $12,000 less than the median annual salary and wage income of all New Hampshire occupations. Education and child care administrators earned median salaries of $60,210 in 2023, slightly less than half the median salary for all Granite State Management Occupations ($120,650).

Low wages and few or no benefits are likely key contributing factors to high turnover rates among early childhood educators. Turnover among child care workers in New Hampshire is projected to be 17 percent annually for the second quarters of 2023 to 2025, compared to a projected 11 percent turnover for all New Hampshire occupations.

Child Care Businesses Don't Make Much Money Either. They Work with Slim Margins. Any Emergency Expenses, Loss of Teachers, or Families Leaving Could Scramble their Finances.

The current child care business model is strained, with publicly-available research suggesting many providers make less than one percent in revenue to reinvest in their businesses.

The Child Care Sector Doesn't Function like Many Other Business Because Class Sizes have to Stay Small for Child Safety and Program Quality. Also, Prices can't be Increased Beyond How Much Parents can Pay.

Unlike other businesses, child care providers are limited in the ways they can streamline or consolidate their operating expenses. Creating a high-quality caregiving and educational environment also requires considerable resources including positive child-teacher and child-child interactions, developmentally appropriate materials and activities that stimulate cognitive development and support learning, curricula and assessments adapted to meet the needs and interests of students in the classroom, regular professional development for teachers and staff, and strong parent-teacher partnerships.

In New Hampshire, Nearly 16,000 People are Unable to Work Due to a Lack of Access to Child Care. This Keeps Potential Employees on the Sideline of our Economy and Limits the Ability of New Hampshire Businesses to Innovate and Grow.

U.S. Census Bureau survey data collected between March 2023 and March 2024 suggest that, on average, nearly 15,500 New Hampshire residents were not employed each month because they were caring for a child not in school or in a child care setting. This is an improvement from the October 2022 to October 2023 timeframe, when the average number of Granite Staters each month who selected this reason for being out of the workforce was 16,500. When potential business losses and government tax revenues were added to a model from the Bipartisan Policy Center exploring collective wage loss among New Hampshire households related to child care shortages, New Hampshire lost an estimated $44,100 to $66,816 per unavailable child care slot (or $48,611 to $73,634 in 2023 dollars) over a ten-year time horizon.

Increased Investment in High Quality Child Care Would Unlock the Potential for Our Families to Thrive. It will also Attract and Retain Well-Trained Child Care Educators and Grow New Hampshire's Economy. Financially Secure Families and a Prosperous New Hampshire is Good for Everyone!

For more analyses and citations, see NHFPI’s May 2024 Issue Brief, The Fragile Economics of the Child Care Sector, and May 2024 Blog, Annual Price of 2023 Child Care for Two Granite State Children Under Five Averaged Nearly $32,000.

     – Nicole Heller, Senior Policy Analyst