Policy Issues Series: Child Care
By George Sarkissian, Director of Policy & Civic Engagement
As election season heats up in New York City, we’re digging into the issues that feel important to the city and keep coming up on the campaign trail. Our PMA newsletters will include a three-part series on policy issues currently impacting the city. While the candidates offer a range of approaches, we’ll explore the case for policy reforms and identify examples of best practices from other cities, in an attempt to contextualize the policy solutions currently being offered by the candidates. We’ll explore three policy areas: child care, housing, and public safety. As Christians, we’re called to “seek the welfare of the city” (Jeremiah 29), and understanding the policies that seek to help our neighbors and communities requires our time, energy, and thoughtfulness. We invite you to dig into these policy issues with us, so that, as followers of Jesus, we can consider them as we vote in the upcoming election.
The Child Care Crisis in NYC
We’ll begin this series with an article on child care in NYC. Most candidates acknowledge our child care system is broken and unaffordable. They offer various solutions, most proposing expansions in the availability of affordable child care, some even suggesting that child care become available universally to all families. The state of child care in New York City is not merely a financial strain on individual families, it is a fundamental constraint on the city's economic and social vitality. The current system's high costs and limited availability are forcing a critical demographic exodus, leading to billions in lost economic activity.
In addition to examining the evidence supporting increased public investment in quality child care, we’ll also study successful global precedents in Quebec, Helsinki, and Tokyo, which demonstrate that well-developed universal child care systems do not lead to fiscal ruin but rather can serve as engines of economic growth and social stability.
Raising a family in NYC can feel difficult for anyone, but for lower-income households it can feel impossible, like climbing a mountain with no peak. For Christians that care about the flourishing of our city, especially its most vulnerable residents, responding to this hardship is how we love our neighbors. Unfortunately, the economic landscape of New York City is being reshaped by a staggering child care affordability crisis. In 2024, the average annual cost of care for an infant or toddler was $18,200 for a family-based program and $26,000 for a center-based program.1 These costs have surged by 79% and 43%, respectively, since 2019, far outpacing the 20% growth in inflation and the 13% increase in average hourly earnings over the same period.1
To put these figures in a broader financial context, the conventional federal benchmark for affordability is for child care to consume no more than 7% of a family's income. By this metric, a New York City family would need to earn $334,000 annually to afford the average cost of center-based care for a two-year-old, an income level four times the city's median family income.1 This makes the cost of care an impossible equation for a majority of working families, often rivaling or even exceeding expenses like rent, a mortgage, or college tuition.2
Demographic and Economic Consequences
The unaffordability of child care is directly linked to a significant demographic shift that poses a threat to the city's future. Between 2020 and 2023, the population of children under the age of three in New York City declined by a stark 19.3%.1 Analysis of out-migration patterns indicates that the majority of families leaving the city are middle-income, with a median household income of $140,000, compared to $95,000 for those who remained.1 This ongoing flight of families who have the resources to leave represents not only a loss of residents but a significant drain on the city's tax base and future talent pool. The financial fallout is already being quantified. In 2022, the city lost an estimated $23 billion in economic activity as parents either left the workforce or relocated from the city entirely.3 This dynamic illustrates a structural weakening of the city's core economic engine.
The Case for Public Investment
The provision of universal child care should be viewed as a vital piece of economic infrastructure, akin to roads or bridges, that enables workers to participate in the labor force.5 Investing in this infrastructure is a self-financing proposition that can generate a substantial return on investment (ROI) for the public sector.
The Return on Public Investment
Research consistently demonstrates a robust fiscal return for public spending on early childhood education. Studies have found that for every dollar invested, the future economic gain can be as high as $9.6 Some long-term programs have even been shown to return $10 or more for each dollar invested.7 These returns are not merely theoretical; they are realized through increased tax revenues from a more productive and higher-earning workforce, and through reduced government expenditures on social services, crime prevention, and public health.6
For New York City specifically, a universal child care system would provide immediate and measurable economic benefits. Higher labor force participation and increased work hours for parents, especially mothers, could increase labor income by nearly $900 million.1 Simultaneously, the disposable income of families would increase by up to $1.9 billion annually, representing the direct savings from the avoidance of child care costs.1 Employers would also realize savings, estimated at $900 million annually, from reduced employee turnover and absenteeism.1
The investment case for child care is unique because its returns are realized across multiple time horizons. The immediate gains in labor supply and disposable income create a powerful economic stimulus, while the long-term benefits in improved human capital further strengthen the tax base and reduce future social costs. This virtuous cycle suggests that a well-designed universal program can become largely self-sustaining over time, making a focus on the upfront costs misguided.6
Boosting the Labor Market and Business Community
Universal child care is a potent tool for revitalizing the labor market, allowing parents to return to work. The availability of reliable, affordable care is directly correlated with increased labor force participation, particularly for mothers. Research shows that a 10% increase in pre-K enrollment is associated with a 1.6 percentage point increase in the average employment rate of mothers with young children.5 A study on a universal pre-kindergarten program in New Haven, Connecticut, found that enrolling a child in the program raised parental earnings by 21.7%, or $5,461 per year, with these gains persisting for at least six years.5 These benefits were not confined to low-income families but extended to parents across all demographic and income levels, demonstrating the program’s universal appeal and broad economic effect.10 The benefits extend beyond individual families to the business community at large. In areas where universal pre-K programs were implemented, overall private sector employment increased by 1.26% more than in non-UPK areas.5
A Foundation for Lifelong Success
The benefits of this early intervention are profound and enduring. Studies confirm that children with access to high-quality early childhood education are less likely to repeat a grade or be identified as having special needs.14 They are more prepared academically for later grades, are more likely to graduate from high school, and tend to have higher earnings in the workforce as adults.14 Research on Norway's universal child care program, for instance, found that the system had significant positive effects on children's adult outcomes, including higher educational attainment and reduced welfare dependency.15 These findings underscore a powerful causal link: investing in a child's early years directly enhances their future academic and economic success. The research from Norway also highlights the social equity impacts of high-quality child care programs, which can buffer children from low-income families against the negative effects of income instability and stress on their behavior and development.16
Global Models of Success: Lessons for New York City
The potential expansion of NYC’s child care system is not a unique or untested endeavor. Several cities and nations worldwide have successfully implemented similar programs with documented success, providing a blueprint for a path forward. Global case studies show that cities and nations can use universal child care as a strategic tool to address economic and social challenges. In Quebec, a low-fee universal child care system implemented in 1997 had a "spectacular impact" on women's labor force participation, resulting in increased tax revenues that made the system fiscally sustainable.9 Similarly, Helsinki, a key part of Finland’s broader social welfare state, provides a legal entitlement to public or subsidized child care for young children, which has supported high rates of female labor force participation19 and a period of strong economic growth22. Meanwhile, Tokyo recently announced free day care for all children under five starting in September 2025 to combat a declining birthrate and labor shortages, explicitly treating child care as essential infrastructure for its economy.20
Conclusion
As we consider the plans of Mayoral candidates for this year’s election, we should measure them against what we learn through in-depth research, as opposed to short posts on social media. The evidence is clear: the case for a new universal child care system in New York City is one of economic necessity, not a matter of social ideology. The current crisis is a profound drain on families, businesses, and the city’s long-term health. While the public debate about the viability of a dramatic expansion of child care has centered around the role of government and labels like “socialism”, an actual examination of the evidence helps contextualize what the candidates are proposing. The research on the benefits of expanding child care and successful global precedents demonstrates that a strategic, well-designed public investment in child care yields a robust fiscal return, while simultaneously addressing the core issues of economic vitality, labor force participation, and childhood development. This is an investment that can pay for itself many times over, transforming the city’s social and economic landscape for generations to come.
Works cited
Child Care Affordability and the Benefits of Universal Provision - Office of the New York City Comptroller Brad Lander, https://comptroller.nyc.gov/reports/child-care-affordability-and-the-benefits-of-universal-provision/
Make Child Care Affordable and Watch the Economy Grow - National Conference of State Legislatures, https://www.ncsl.org/state-legislatures-news/details/make-child-care-affordable-and-watch-the-economy-grow
Towards a Working Future - NYC Economic Development Corporation, https://edc.nyc/sites/default/files/2023-03/Childcare-Toolkit.pdf
Universal Child Care Can't Be Done? Keep an Eye on What NYC Is Doing, https://www.governing.com/policy/universal-child-care-cant-be-done-keep-an-eye-on-what-nyc-is-doing
New Evidence Suggests Expanding Access to Pre-K is Good for the Economy, https://www.ffyf.org/2024/10/10/new-evidence-suggests-expanding-access-to-pre-k-is-good-for-the-economy/
Child Care Investment Is Crucial for Future Economic Growth - Ways and Means - Democrats https://democrats-waysandmeans.house.gov/sites/evo-subsites/democrats-waysandmeans.house.gov/files/documents/Beyer_2%20220615.pdf
The Return on Investing in Children - Urban Institute, https://www.urban.org/sites/default/files/2023-09/The%20Return%20on%20Investing%20in%20Children.pdf
Child Care Affordability and the Benefits of Universal Provision - Office of the New York City Comptroller Brad Lander, https://comptroller.nyc.gov/reports/child-care-affordability-and-the-benefits-of-universal-provision/
What Have Been the Effects of Quebec's Universal Childcare System on Women's Economic Security? - House of Commons, https://www.ourcommons.ca/content/Committee/421/FEWO/Brief/BR8806290/br-external/FortinPierre-e.pdf
The labor market case for early childhood education - Brookings Institution, https://www.brookings.edu/articles/the-labor-market-case-for-early-childhood-education/
Economy & Business - First Five Years Fund, https://www.ffyf.org/by-topic/economy-business/
Why Quality Matters | Child Care VA - Virginia.gov, https://www.childcare.virginia.gov/families/why-quality-matters
Why does quality matter? - UGA FACS, https://www.fcs.uga.edu/extension/ccqm-why-does-quality-matter
Early Childhood Education - NEA, https://www.nea.org/advocating-for-change/action-center/our-issues/early-childhood-education
Universal Child Care and Children's Long-Run Outcomes - The Institute for the Study of Labor, https://d-nb.info/998519308/34
Family Income Dynamics, Early Childhood Education and Care, and Early Child Behavior Problems in Norway - PMC - PubMed Central, https://pmc.ncbi.nlm.nih.gov/articles/PMC4376602/
Impact of the low-fee universal childcare program in Quebec, 1998 to 2015, https://www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2022043-eng.htm
Neighborhood-based factors predicting attendance of early childhood education and care in a universal system: A case of Finland, https://www.tandfonline.com/doi/full/10.1080/00313831.2023.2250375
Cash versus Child Care Services in Finland - ResearchGate, https://www.researchgate.net/publication/227805703_Cash_versus_Child_Care_Services_in_Finland
Tokyo's Innovative Childcare Vision Could Kick-start a Global Trend ..., https://www.goodnet.org/articles/tokyos-innovative-childcare-vision-could-kickstart-global-trend
Tokyo Tackles Rising Costs with Free Childcare for Kids Under 5 - The Bump, https://www.thebump.com/news/toyko-offers-free-childcare-kids-under-5
International review of approaches to tackling child poverty: Finland - The Scottish Government, https://www.gov.scot/publications/international-review-approaches-tackling-child-poverty-finland/pages/4/
Policies supporting children and child-rearing - Prime Minister's Office of Japan, https://japan.kantei.go.jp/ongoingtopics/policies_kishida/childsupport.html