Private Equity Is Not Why American Childcare Costs So Much
The Story
Private equity owns about a tenth of the American childcare workforce and is not the reason the sector became unaffordable, the first systematic study of it finds.
Jessica Brown of the University of South Carolina and Chris Herbst of Arizona State University found that share stopped growing around 2010 and has held near 10 percent since.
Three quarters of those centers sit in just 5 percent of United States counties, clustered around Phoenix, Las Vegas, Denver, Atlanta and northern Virginia.
They have operated for 18 years on average, longer than other chains, and added staff between 2021 and 2024 while other providers were cutting.
They take public subsidies less often than other large chains, 70 percent against 78, and are more likely to hold their state's top quality rating.
What gives Herbst pause is geography rather than quality: care that may be very good but sits where the families who need it most cannot reach it.
Jessica Brown of the University of South Carolina and Chris Herbst of Arizona State University found that share stopped growing around 2010 and has held near 10 percent since.
Three quarters of those centers sit in just 5 percent of United States counties, clustered around Phoenix, Las Vegas, Denver, Atlanta and northern Virginia.
They have operated for 18 years on average, longer than other chains, and added staff between 2021 and 2024 while other providers were cutting.
They take public subsidies less often than other large chains, 70 percent against 78, and are more likely to hold their state's top quality rating.
What gives Herbst pause is geography rather than quality: care that may be very good but sits where the families who need it most cannot reach it.
Why It Matters
Advocacy borrowed its childcare argument from nursing homes, and the borrowing is now the weak link. Two economists find a sector where private equity stalled at a tenth of the workforce, sits in 5 percent of counties and rates well on quality, which leaves affordability needing a different culprit. The political machinery is moving regardless. Senator Jeff Merkley has demanded financial records, ownership structures and safety data from KinderCare and Learning Care Group, which run 1,500 and 1,100 centers across 40 states and serve more than 365,000 children. Whether the case survives contact with the research depends on what those documents show when the Budget Committee publishes them.
Go Deeper
Read the original reporting at Vox.
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