Sarah Bohn, PPIC vice president and director of the PPIC Economic Policy Center, testified before the Assembly Select Committee on Child Care Costs on August 20, 2025. Here are her prepared remarks.

Good afternoon and thank you for inviting me to provide testimony today.

As you all appreciate keenly, Californians are very concerned about their economic stability. One-third feel financially worse off than they were a year ago, according to the June PPIC Statewide Survey. Californians are also concerned about the long term, with 70% believing the state’s children will be financially worse off than their parents. The present economic challenges are complex, but in my testimony today I’d like to highlight the obstacles parents confront paying for child care and balancing work and care—as well as what that means for the economy more broadly.

The average California household spends 73% of their income on food, housing, transportation, and health care. That means there is not much money left over for care responsibilities. And those costs are substantial. Based on recent estimates from my colleagues at PPIC, the cost of child care for young children ranges from 6% to 28% of the median family income (this varies by age of child, region, and care setting). The PPIC Statewide Survey suggests that this expense weighs heavily on Californians’ minds; 13% of parents with children in the household say they worry about the cost of child care every day or nearly every day. For parents of children under age five, this percentage would likely be much higher.

Eligible families may access subsidies for care, which have increased notably over the past decade. To improve access and affordability, the state has added more spaces to existing programs and expanded transitional kindergarten to include all four-year-olds. But the unmet need is substantial, especially for the youngest children. Across counties, one estimate suggests that no more than 23% of eligible families with infants received subsidized care, though this number is a bit out of date (2017).

Parents who cannot find subsidized care may choose to pay out of pocket or lean on family, friends, or neighbors to access the care they need for their children. For some, the costs put them in or closer to poverty. Our research suggests that poverty among families with preschoolers would be 24% lower if all of those children had access to subsidized care.

For some families, paying for care dampens the extent to which they can save, handle emergency expenses, or invest in education or starting a business. This affects their immediate and long-term financial well-being as well as the economy overall. In focus groups that we have held over the past year, one child care provider in San Mateo County said, “Subsidized care takes a huge burden off families, allowing parents to go back to work or school and contribute to their household income.”

So that is the first economic cost: the opportunity cost of unaffordable child care means that families have less money to spend on their other needs and invest in their future.

The second economic implication is related: access to child care affects parents’ choices of whether to work or not. These are complex, personal decisions, but there are broader patterns that suggest some parents face systemic barriers when it comes to employment.

Our research in California finds that mothers of young children are less likely to work than fathers, by 29 percentage points. This is the case even among families where both parents are college educated, although the gap between mothers and fathers shrinks with each successive level of educational attainment. Time spent on dependent care falls much more heavily on mothers than fathers, even when both parents are working.

We did a back-of-the-envelope calculation using data on the circumstances of California’s women with children to benchmark how decisions about work and child care affect the California workforce overall. If mothers of young children were as likely to work as mothers of older children—which can help us gauge the potential of a robust expansion of accessible and affordable child care for young children—some of the gender gap would close (4 percentage points). In the aggregate, this could put over 80,000 more women in the labor force annually. These results are consistent with national research showing that increases in Child Care and Development Fund (CCDF) expenditures increased employment of low-income mothers in the US.

In addition, improved access to affordable care could encourage some California mothers to work more hours. For example, one mother in our focus group in the Bay Area said, “my issue is I need to work full time but I can’t because I don’t have child care. And I’ve done the numbers, if I go full time I’m just paying someone with that extra income…it’s not worth it.”

When mothers leave the workforce to care for children—either part time or full time—their earnings also suffer over the long run. The gender wage gap is well-documented, and some of that arises because women take more time out of the workforce to care for children. In fact, the penalty of doing so is a bit larger for mothers than for fathers.

There is a strong imperative to address barriers to work so that individuals and families can better meet their economic needs and so that the state can bolster its economy. Our workforce is shrinking relative to the population because the baby boom generation is reaching retirement age. To ensure we have the workforce that businesses need to grow and serve an aging population, we need to maximize the ability to work among those who want to.

The pandemic provided an interesting (if painful) window into how to do that. The unemployment rate for women initially worsened more so than for men in California. But by the end of 2022, women’s employment had recovered more quickly and even saw gains compared to before the pandemic. While still anecdotal, these patterns are consistent with increasing flexibility in remote work and the improved capacity for mothers, in particular, to balance care and work. Job characteristics like the ability to work remotely some or all of the time, flexible work schedules, and paid family leave matter for the work choices of California’s parents.

Balancing child care and finances is a tightrope act for many families. When parents’ choices are constrained by the child care market or the job market—due to factors like the affordability and accessibility of care, and the quality of available jobs—the results affect not just families’ well-being but also the overall strength of California’s workforce and economy.