How childcare costs in Minnesota compare to other states: A 2021 update

Minnesota is one of the most expensive states for center-based childcare as American Experiment noted in June. In 2019, for example, families spent over $16,000 to send their infant to a licensed daycare center. For families with the state Median household income, this represented over one-fifth of their total income. Parents also paid a lot for older kids.

This week, Child Care Aware of America released new data on childcare costs for 2021. This should allow us to see not only how Minnesota’s childcare costs for 2021 compared to those of other states, but also how they compared to the past.

In other words, has there been any change in childcare affordability for Minnesota between 2019 and 2021? And how affordable was childcare in Minnesota compared to other states in 2021?

Childcare costs in 2021

According to the data, Minnesotans spent about $17,000 to keep their infant in a licensed center for the whole year, ranking Minnesota as the ninth most expensive state for center-based infant care.

Figure: The cost of licensed center-based care for infants, 2021

As a proportion of income, Minnesotans with median household income spent 21.2 percent of their income to keep their infant in a daycare center — also ranking as the ninth most expensive state for center-based infant care.

Figure 2: Cost of center-based infant care as a percent of state median household income, 2021

The cost for older kids was also similar. In 2021, Minnesota ranked the eighth most expensive state for center-based care for both toddlers and 4-year-olds — in dollar terms. As a proportion of income, Minnesota ranked as the eleventh most expensive state for center-based care for both toddlers and 4-year-olds.

How costs compare to 2019

In 2019, Minnesota ranked as the sixth most expensive state for center-based infant care — in dollar terms. As a proportion of income, Minnesota ranked as the fourth most expensive state for center-based care. Compared to 2021, these rankings suggest some slight improvement in childcare affordability since 2019

But is that the case? Further analysis suggests no.

Adjusted for inflation, the cost of center-based care has stayed almost the same between 2019 and 2021 – at least from the data provided by Childcare Aware. Moreover, in both 2019 and 2021, center-based infant care took up nearly 22 percent of the median household income, suggesting no change in affordability.

So, why have the rankings changed? There are two possible explanations.

Firstly, there are a couple of states that have seen their childcare costs skyrocket between 2019 and 2021.

In 2019, for example, the price of daycare centers for infants in Washington, New York, and Hawaii, was less than that of Minnesota. However, in these states, costs went up considerably in 2021. Center-based infant care in New York cost $13,390 in 2019, for instance. But in 2021, it cost over $18,000 — more than what it cost in Minnesota the same year. Similarly, in 2019, center-based infant care cost $14,300 in Hawaii, but in 2021, it was over $18,000.

Secondly, some states also saw a significant decline in income levels, which means that parents were paying a bigger proportion of their incomes, than previously.

Hawaii, for example, saw childcare costs skyrocket while incomes also declined at the same. So, while it ranked the 29th most expensive state for center-based infant care as a proportion of median household income, in 2021, it ranked the sixth most expensive state.

West Virginia, saw its household income drop by 17 percent between 2019 and 2021 (the biggest drop in the country), which worsened childcare affordability in the state. The state moved from being the 17th most expensive state for center-based infant care as a proportion of household income in 2019 to the seventh highest in 2021.

Childcare affordability is still a big issue

Much like in 2019, Minnesota was one of the top ten most expensive states for center-based infant care in 2021. And while our state slid up the rankings in 2021 — albeit slightly —, that was only due to the fact that few other states have fared worse in comparison between 2019 and 2021.

Childcare affordability has not improved in our state since 2019. If anything, the childcare crisis has potentially been made worse by the coronavirus pandemic.