Child Care State Reports . II. Affordability [5]

12/01/1999

  • Prices for child care vary considerably, by such factors as geographic area, type of provider and age of child. Figure 2 shows the average monthly prices for child care in Pittsburgh and Philadelphia, Pennsylvania. Given that these are average prices, it is clear that many families pay more or less than this amount.
  • Centers in Pittsburgh charge an average of $490 per month for preschool care and $589 per month for infant care, as shown in Figure 2. This means that a family with $15,000 in income and one preschool child in an average-priced center would spend close to two-fifths (39 percent) of its total monthly income on child care expenses. Average-priced infant care would represent an even higher share (47 percent) of monthly income for a family earning $15,000.
    • Accredited care costs even more, $550 per month for a preschooler in center-based care, or about 44 percent of family income for families with $15,000 in income.* Families with an infant in an accredited center would pay $680, or more than half (54 percent) of family income for families earning $15,000.
  • Centers in Philadelphia charge even more per month for care, particularly for infants. Average-priced preschool center care costs $494 a month, or about 40 percent of monthly income for a family earning $15,000. If this low-income family had an infant, rather than a preschooler, in average-priced center care, the $620 per month price would consume 50 percent of the family’s total income.
Figure 2. Child Care Prices and Co-Payments for Hypothetical Pennsylvania Families of Three Earning $15,000 with One Child in Care
  WITHOUT SUBSIDY WITH SUBSIDY
Average Monthly Prices
(Full Time Care)
% of Income
(Family Income of $15,000 Annually)
Monthly Co-Payments*
(If receive subsidy)
% of Income*
(Family Income of $15,000 Annually)
FAMILY LIVING IN PITTSBURGH, PENNSYLVANIA
INFANT (1 year)
Center-based $589 47.1% $108 8.7%
Accredited center-based $680 54.4% $108 8.7%
Family child care home $481 38.5% $108 8.7%
PRESCHOOLER (4 years)
Center-based $490 39.2% $108 8.7%
Accredited center-based $550 44.0% $108 8.7%
Family child care home $455 36.4% $108 8.7%
FAMILY LIVING IN PHILADELPHIA, PENNSYLVANIA
INFANT (1 year)
Center-based $620 49.6% $108 8.7%
Accredited center-based** NA NA $108 8.7%
Family child care home $446 35.7% $108 8.7%
PRESCHOOLER (4 years)
Center-based $494 39.5% $108 8.7%
Accredited center-based** NA NA $108 8.7%
Family child care home $407 32.6% $108 8.7%

*  State policy does not prevent allows providers from to charging parents additional amounts, above the co-payment, if the providers’ rates exceed the state reimbursement level.

**  Accredited prices were not available for Philadelphia due to small sample sizes.

Source:  Data collected by the Urban Institute from Child Care Partnerships and Philadelphia Child Care Resources South/Center City, child care resource and referral agencies serving Pittsburgh and Philadelphia, respectively, summer 1999.

  • Family child care homes in Pittsburgh, Pennsylvania charge an average of $455 for preschool children and $481 per month for infants. This means that a family with $15,000 in income and one child in an average-priced family child care home would spend 36 percent of its monthly income on care for a preschool child or 39 percent of income for an infant. A family in Philadelphia with the same annual income using average-priced family child care would spend 33 percent of its monthly income ($407 per month) for preschool care or 36 percent ($446 per month) for an infant.
  • Families who receive child care subsidies usually pay much smaller monthly co-payments rather than the full market rate. Such co-payments are established under a sliding fee schedule, and are based on family size and income.
    • For example, a family with $15,000 in income and one preschooler or infant in an average-priced center in Pennsylvania would be charged a monthly co-payment of $108, or 8.7 percent of monthly income, as shown in Figure 2.
    • In Pennsylvania, welfare recipients in an unpaid work activity, or employed but yet to receive a paycheck, are exempt from paying a co-payment.
  • State policy does not prevent providers from charging parents additional amounts, above the co-payment, if the providers’ rates exceed the state reimbursement level. For example, the maximum CCDF rate for preschool center care in Pittsburgh is $453 per month6, which is $37 less than the $490 average price shown in Figure 2**.  If the $37 differential is paid by the family, the total cost to the family is $145 per month, more than the official co-payment of $108 shown in Figure 2. If the fee is not charged to the family, the provider loses $37 per month for providing service to a subsidized child. The differential could be much larger than $37 for some child care centers, including accredited centers and other centers with higher than average rates.