Stay-at-home moms are on the rise, but not always by choice

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The Hidden Costs of Child Care


Families have a lot of tough decisions to make, when it comes to finances. One of the trickiest can be whether or not one parent ought to stay home while the kids are young. There are many pieces to this complicated puzzle, but a recent report shows that one single factor is pretty influential – the cost of child care versus the price of rent. Let's take a closer look at the findings.

SEE ALSO: The gender pay gap begins as early as age 5

The high cost of child care forces families to make tough decisions.

A new paper from the Economic Policy Institute highlights the stark financial reality facing parents in today's economy. Child care, in many towns and cities around the country, is expensive to say the least. In 500 out of 618 communities examined in the study, the cost of paying for child care for two kids exceeds rent. And, that's not all the bad news:

1. A large portion of family budgets goes to child care.

The cost of child care varies widely by region. In South Carolina, for example, the monthly cost of child care for one four-year-old is $344. In Washington D.C. though, the average cost per month is $1,472. When families have more than one child, the cost is a burden more often than not.

"Among families with two children (a 4-year-old and an 8-year-old) child care costs exceed rent in 500 out of 618 family budget areas," write Elise Gould and Tanyell Cooke, senior economist and research assistant at EPI, respectively. "For two-child families, child care costs range from about half as much as rent in San Francisco to nearly three times rent in Binghamton, New York."

2. Child care is virtually unattainable for minimum wage workers.

Affording child care is particularly difficult for those working for minimum wage. When the cost is broken down in terms of a percentage of income, the results are pretty alarming. Child care costs eat up a large chunk of the family budget in these cases. The study uses the example of a minimum wage worker in Hawaii as an example. In order to meet the cost of infant care for one year, a worker would need to spend all of their earnings from January through September.

3. Child care costs are actually higher than college tuition in many states.

Despite the fact that college tuition costs have been on the rise for quite some time, child care costs are actually higher than these rates in many states.

Gould and Cooke write:

"The average annual cost of tuition for an in-state full-time undergraduate student in a degree-granting public institution ranges from $3,756 in Wyoming to $14,469 in New Hampshire.... While these sums are sizable, 4-year-old care exceeds the average cost of in-state college tuition at public 4-year institutions in 24 states and the District of Columbia."

So, given the steep cost of child care families face across the country, the question becomes, how do these rates impact the decision-making process when it comes time to make choices about working outside of the home?

Well, it turns out that when rent is higher than child care, mothers often "choose" to stay home rather than work.

"The percentage of mothers who stay at home with their children has been on the rise since 1993, and it's not because formerly career-driven women have suddenly woken up to the joys of full-time baby bonding," writes Christina Cauterucci at Slate. "In nearly 81 percent of U.S. towns, the average price of two-kid child care costs more than rent, which can make working a full-time job seem like a poor economic decision."

These moms aren't always making the decision to stay home because that's what they'd prefer to do. It's just that the costs mean that working (and paying for child care) is often more expensive than staying home. And, thanks to the gender wage gap, it's often more profitable for mom to stay home instead of dad.

READ MORE: Understanding the Gender Pay Gap

Additionally, the current reality of our culture is that mothers are more likely than fathers to experience career interruptions when raising a family. It might be time to update our old-fashioned idea that only wealthy parents can afford to have one parent stay-at-home with the kids. These days, it's the only option some families feel that they have.

Be sure to check out the full report from the Economic Policy Institute for more information on how the data shakes out in your state, or look up your city on the interactive map, below:

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