Universal Child Care in California Is ‘Feasible,’ UC and Stanford Experts Say

The soaring cost of child care has recently led states like New Mexico to offer universal child care and cities like New York and San Francisco to expand free and low-cost child care to income-eligible families.

Could it be done in California?

In two papers published Friday, researchers say, in short: Yes. The state could build upon its ongoing investments in child care and work toward universal care for infants and toddlers, aged three and under.

The cost could reach up to $21 billion per year to subsidize all families, but it would generate as much as $23 billion in economic output — essentially paying for itself — by allowing mothers of young children to rejoin the workforce, according to an analysis by the Stanford Institute for Economic Policy Research.

“That is not considering the many other benefits that accrue to the children themselves, to families and to society from having a robust, high-quality, well-functioning early childhood care and education market,” said Chloe Gibbs, a policy fellow at the institute.

Child care prices went up 29% across the country from 2020 to 2024, according to Child Care Aware of America, a national network of child care resource and referral agencies. The prices outpaced overall inflation as increased demand for care collided with a worsening shortage of child care workers, according to the business firm KPMG, which noted that women with young children are increasingly working part-time, missing work or leaving the labor force entirely.

“Affordability concerns are front and center for American households, and that also means there is a political and policy window of opportunity to take strides,” said Neale Mahoney, an economics professor and director of the Stanford Institute for Economic Policy Research.

Economists call child care an example of a market failure because the cost of providing care exceeds what families can afford to pay, resulting in an imbalance between supply and demand.

Child care for infants and toddlers is harder to come by and costs the most because babies require constant attention. Providers must maintain a low caregiver-to-child ratio, which limits capacity, but have a hard time retaining workers. Policy experts say subsidies can help close the gap between what parents can afford and what it actually costs to provide high-quality care.

Specifically, Stanford economists estimate that California could subsidize infant and toddler care for low- and middle-income earners at a cost of between $4 billion to $8 billion per year, or between $12 billion to $21 billion to scale the subsidies to all families.

A universal “zero to three” child care program could allow more than 100,000 mothers of young children to join the workforce, they said. Stanford coordinated the publication of its policy brief with another by researchers at the University of California that outlines ways to build up the child care system.

The paper by two early childhood policy experts at UC Irvine and UC Berkeley lays out more than a dozen suggestions to build a child care system that works for families and child providers.

They include consolidating more than a dozen funding streams for child care and simplifying eligibility rules to make it easier for child care providers to enroll families; making Head Start centers eligible for state funding so they can serve more children; cutting fees and easing zoning restrictions to get child care facilities up and running faster; and setting up a comprehensive online portal where families can find the kind of child care they need and providers can respond to market demand.

“We don’t have anybody that’s looking out across California [for child care needs] the way we look at where we should build schools or where we should put bus stops or post offices,” said Jade Jenkins, a professor at UC Irvine’s School of Education. “If we provide families information in this online marketplace to make finding child care as easy as it would be to register for yoga … we could meet families where they are at and draw providers in.”

She said modernizing child care information is one of several low-cost fixes the state can undertake to prepare for expansion.

Last year, Assembly Speaker Robert Rivas called California’s cost of living “the single biggest threat to our future” and set up a select committee to focus on child care costs. He said now that California has fully expanded transitional kindergarten, also known as TK, to offer a free year of schooling for all 4-year-olds, it’s time for the legislature to focus on helping families afford child care for the youngest kids.

The committee held three hearings last year but has yet to propose any solution. At a hearing held in Los Angeles, only one of 13 members of the committee showed up.

At the most recent hearing in December, Assembly Majority Leader Cecilia Aguiar-Curry, who co-chairs the committee, told KQED that more time is needed to investigate which model of child care expansion works.

“I’ve been working on this ever since I came [to the legislature] in 2016, and I can see that we’ve got more work to do, but we got to do it right, and we just can’t be slapstick,” she said.

She said the quick buildout of TK led to unintended consequences, including the closure of private or nonprofit-based preschools that lost their 4-year-old students to publicly-funded schools and struggled to pivot to serving younger kids.

Aguiar-Curry said New Mexico could offer universal child care because it has a smaller population and can draw on oil and gas profits to fund the initiative. That’s harder to do in a big state like California, she said.

“We’ll see how they roll that out,” she said. “I hope that they’re successful and I hope we can all learn from their lessons.”

In an email message Thursday, Aguiar-Curry said she looks forward to digging into the new reports. In the meantime, she said she’ll keep working with the legislature and Gov. Gavin Newsom to follow through on promises to raise reimbursement rates for child care providers participating in the subsidy system and fund up to 200,000 subsidized child care slots.

“Those steps will make a real difference for families across the state, and we’re going to keep pushing to bring costs down,” she said.