New Report: Child Care Crisis Cost North Carolina $2.4 Billion Yearly—Before the Pandemic

New data from the North Carolina Early Childhood Foundation show even greater economic losses for NC’s families, businesses and economy stemming from insufficient child care during COVID-19

Raleigh, N.C., December 16—The North Carolina Early Childhood Foundation (NCECF) released results today from the state’s first survey on how families are navigating child care and work before and during COVID-19.

The data show that before the COVID-19 pandemic, North Carolina families, businesses and the economy were already losing $2.4 billion annually due to insufficient affordable, high quality child care. The pandemic is making this crisis worse. Data show that the annual losses due to inadequate child care are now approaching $2.9 billion a year—and likely still climbing.

“Parents are sharing that due to inadequate child care, they’re having trouble finding work or are able to spend less time working and building job-related skills,” said NCECF Executive Director Muffy Grant. “In turn, this harms businesses and our economy.”

Because more than 400,000 North Carolina parents were already struggling to find child care that would empower them to work, build family stability and support a strong state economy before the pandemic:

  • Families were losing $1,548 million in current and future earnings and incurring additional job search costs. This number has jumped to $1,796 million mid-pandemic.
  • Businesses were losing $507 million in current and future revenue due to lower output and incurring additional workforce hiring costs. This number has reached $579 million mid-pandemic.
  • The state’s economy was losing $414 million in current and future tax revenues and drawing from a smaller state and local tax base, reducing tax revenues equivalent to almost 1 percent of the state budget. That number has rocketed to $472 million mid-pandemic.

During its survey, NCECF and its partners surveyed 802 working parents with young children in North Carolina. The survey participants’ characteristics correspond closely to North Carolina’s demographics, representing urban, suburban and rural populations well, along with the state’s racial demographics.

Findings include that:

Before the pandemic:

  • 44 percent of North Carolina families were already living in child care deserts.
  • Less than half of employers offered at least one child care support for parents such as paid leave, flexible scheduling or an on-site child care facility.
  • Women of color had access to fewer child-care related employer supports.

Currently, mid-pandemic:

  • 55 percent of households report that at least one adult has lost a job, been furloughed or experienced reduced pay or hours due to COVID-19.
  • Formal child care availability has fallen by approximately half since the pandemic began.
  • More than 70 percent have had difficulty finding a satisfactory child care arrangement—and about 10 percent couldn’t find one at all.
  • As the pandemic continues, 25 percent of working parents predict their child care will disappear, and 30 percent predict that child care will be unaffordable or incompatible with their work commitments.

The pandemic hit families across North Carolina. But it’s hitting some even harder:

  • Only 15 percent of rural families were accessing formal child care mid-pandemic, down from 44 percent pre-pandemic.
  • Women of color more frequently report that their provider is no longer open, they cannot find an alternative, and they cannot afford one because of reduced income.

“Without access to high quality child care, families and children suffer, and businesses and our economy lose out, too,” said Dr. Clive Belfield, professor of economics at City of New York University and researcher for the NCECF report. “The good news is, long-term studies find that the economic benefits of investments in early education easily exceed the program costs. By investing in these programs now, we can work toward a strong North Carolina in the future.”

NCECF’s parent survey data will be considered, along with other research and policy analysis, as part of statewide conversations among early childhood experts, child care providers, policymakers, business and community leaders, and parents. The team will then suggest a data-driven path forward to solve North Carolina’s child care crisis.

To learn more, reach out to Muffy Grant (contact info below), read the full report or view and download an infographic overview.

About the North Carolina Early Childhood Foundation

As the state’s only organization focused exclusively on children from birth through age eight, the North Carolina Early Childhood Foundation works to promote understanding, spearhead collaboration and advance policies to ensure each North Carolina child is on track for lifelong success by the end of third grade. Learn more here at


Muffy Grant, Executive Director   

NC Early Childhood Foundation