The 10 States Where Childcare is Cheapest

Americans spend nearly a third of their income on childcare, a new analysis showed, with the midwestern state of Iowa costing families the least while Nevadans pay the highest for such help.

Iowans fork out an average of a little over $182 per week on childcare compared to Nevada, where it costs nearly $500, according to an analysis by the personal finance platform HelpAdvisor, which relied on data from the U.S. Census Bureau. Americans, overall, spend about $325 for childcare per week.

San Francisco is the most expensive city for childcare where it costs $510 a week, while Dallas is the least costly at $320 per week.

As federal support for childcare from COVID-era stimulus programs expires, families across the country face increased outlays from their incomes to be directed to childcare. The $24 billion that came from President Joe Biden's 2021 American Rescue Plan ended in September. HelpAdvisor pointed out that more than 3 million children are projected to lose care with more than ten thousand daycare centers forced to close.

"The closure of so many childcare centers has created fewer options for parents coupled with higher costs and long wait lists due to the diminished competition. More than half of Americans live in a childcare desert," the report from HelpAdvisor said.

The analysis showed that households earning less than $25,000 per year spent close to $300 compared to families that make nearly $150,000 who allocate $276 a week on such assistance.

There are also differences along demographic lines, HelpAdvisor showed.

At nearly $478, Asian Americans shell out the most on weekly childcare while Black parents spend the lowest at about $305.36. Millennials, Americans between the ages of 25 to 39 years old, are spending more than $332 a week on the service.

Here is the full list of states where childcare is cheapest:

1. Iowa ($182). 2. Mississippi ($203). 3. Oklahoma ($209). 4. Arkansas ($219). 5. Alabama ($230). 6. Indiana ($230.45). 7. South Carolina ($236). 8. West Virginia ($238). 9. Maine ($243). 10. Wyoming ($244).

Part of the high cost of childcare may be because the sector struggles to attract enough people to provide the service, according to the U.S. Department of Labor. Childcare workers earn a meager $13.22 an hour.

"This is lower than almost any other occupation, and wages fall below the living wage in most states, failing to meet childcare workers' basic needs," the DoL has pointed out. "Low pay in the childcare sector means that employers cannot attract sufficient workers and many areas are considered childcare deserts, leaving families with limited options."

The cost of childcare has implications for the U.S. economy at large. Research shows that the responsibility of caring for children in families tends to fall on women, to the detriment of their careers and earning power.

Some women are forced to stop working to care for their children at a cost to the American economy. Over the next five years, for example, millions of women are expected to join the labor force and could help the U.S. economy expand by 1 percent over the period. But this is not a guarantee as a lack of childcare may force some women to hit pause on working.

"By far the overwhelming factor depressing labor force participation for women relative to men is that women are far more likely to drop out due to family responsibilities," according to research outfit Oxford Economics.