U.S. Child Care Market Expected To Witness A Substantial Growth Of $83.6 Billion By 2030: Grand View Research Inc.

 

The U.S. child care market size is expected to reach USD 83.6 billion by 2030, based on a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 4.18% from 2023 to 2030. The key factors driving the growth include an increase in awareness regarding early education, high demand for early education centers, and an increase in the number of working parents. In addition, the advancement in learning technologies for children is resulting in further growth opportunities.

Public awareness campaigns and government programs have increased awareness about child education & development in the U.S. The National Center for Healthy Safe Children is spreading awareness regarding the development of the child & need for developing skills at an early age. Factors such as the growing disposable income in the U.S. and the interest of parents to give top-quality care & early education to their children are also resulting in higher demand for early education centers.

However, the affordability of early education services in the U.S. is a huge concern. 63% of full-time working parents are finding it difficult to afford the services. 1 in 3 American families is struggling to pay for early attention and education services. Hence the high cost of services is negatively impacting the market. The quality of services is another challenge According to the National Institute of child health and human development, only 10% of the child care services available are of high quality.

The COVID-19 pandemic resulted in the closure of facilities temporarily due to restrictions by the government. The services resumed shortly, despite the risk of infection involved. This resulted in higher operating costs for the service providers. A 47% increase in operations cost was observed as per the report by the Center for American Progress. The cost of home-based services witnessed a 70% rise since the pandemic. The high cost of service has negatively impacted the market, worsening the affordability issues.

The key factor driving the growth is the increasing demand for early daycare & education services, as parents are resuming full-time offices post-COVID-19. The increasing number of single mothers, the adoption of new learning technologies for children, and the availability of government funding are propelling the industry’s growth.

The expenditure on daycare in the U.S. is very high. As per the Harvard Business Review, 57% of working families in the U.S. spent more than USD 10,000 on daycare. As per the cost of care survey facilitated by the U.S. department of health and human services, the expenditure on these services reached up to 20% of the household income for more than half of American families. Families in the U.S. are willing to spend more on childcare services, indicating the high service demand in the U.S.

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Single-parent families are rising in the U.S., as per the 2022 single-parent statistics U.S., around 11 million single-parent families were reported in 2022, of which 80% of single-parent families are mothers. The single-parent families can find it hard to provide the required attention to their children, thus, may need to rely on childcare centers for their kids’ early education and well-being. The Southern States in the U.S. have the highest single-parent population. South Carolina, Florida, Georgia, Mississippi, and Louisiana have the highest number of single-parent households. Louisiana reported over 40% single-parent households, the highest in U.S. Hence, the southern region is expected to have the highest demand.

U.S. Child Care Market Report Highlights

• Based on type, the early education & daycare segment dominated the market in 2022. This can be attributed to the partnership by child development & early education centers with employers to support employee child care and the adoption of advised technology aiming at the transformation of just daycare into proper early education
• Based on delivery type, organized care facilities dominated in 2022. This is due to the growing requirement for more facilities as a result of the increasing no of families with both parents working and single-parent families
• The COVID-19 pandemic has promoted home-based services, as corporate organizations supported their employees working from home, by facilitating home-based service
• The key players are taking initiatives to expand their quality of service in the U.S. through collaborations & mergers and acquisitions with players from other nations to get their expertise in the U.S. For Instance, in May 2022, Bright Horizons announced an agreement for the acquisition of Only About Children, a high-quality child care services provider based in Australia, aiming to apply their quality techniques in the U.S., enhancing the quality of services

Moreover, favorable government funding is expected to support market growth. The majority of children under the age of five in the U.S. receive government-funded early care and education services each year. The state governments in the U.S. are supporting families to afford daycare services & improve the sustainability of the market. The Department of Social Services California supports daycare by providing families with low-cost or free childcare, depending on the eligibility of the family.

In 2023, 38,843 children received assistance from the state government for daycare services. In North Carolina, The state department of health and human services announced the revision of daycare support plans in March 2022. The North Carolina state government proposed plans to hire an external group for analyzing its daycare subsidy model for designing new ways to improve funding for the services.

However, the accessibility to early childhood learning services in the U.S. is an issue. There are regions in the U.S. termed the daycare desert. As per the Center for American Progress (CAP), 51% of Americans live in daycare deserts 43% of the people in these regions are high-income families. Pennsylvania & North Carolina are child care deserts. North Carolina has a severe lack of daycare centers.

List of Key Players in the U.S. Child Care Market

• Bright Horizons Family Solutions, Inc.
• KinderCare Education
• Primrose Schools.
• Learning Care Group, Inc.
• Spring Education Group.
• Cadence Education
• The Learning Experience
• Childcare Network
• Kids ‘R’ Learning Academies
• Goddard Systems