Abstract
In recent decades, childcare costs have outpaced family incomes and put pressure on family
budgets. Legislators typically consider government subsidies to be the primary solution to rising
costs, despite the high cost of broadly subsidizing care and possible adverse effects on families
and children. Yet policymakers have paid little attention to how existing regulations limit childcare
supply and increase costs, despite research emphasizing this relationship. According to the
most recent data, restrictive child-staff ratios and education credentials are associated with the
highest average costs in states. Childcare is more than twice as expensive in states with the most
restrictive regulations than in states with the least. In states that require an associate degree for
day care center teachers, the average annual cost of infant care is $20,303, while in states with no
education requirement, the average cost is $11,021. In states with the most restrictive child-staff
ratios, average annual toddler care costs $20,196, while the cost is $7,254 in the state with the least
restrictive child-staff ratio. Zoning and immigration policies limit families’ childcare options further,
and collectively, regulatory policy carries meaningful consequences for families, opportunity, and
upward mobility. To improve access and affordability, policymakers must look beyond subsidies
and comprehensively reform barriers to care.