U.S. Child Care Market (2026 - 2033)

U.S. Child Care Market Summary

The U.S. child care market size was valued at USD 86.2 million in 2025 and is expected to grow from USD 91.9 million in 2026 to USD 147.2 million by 2033, at a CAGR of 7.0% from 2026 to 2033. This growth is driven by the increased demand due to more parents returning to offices, advancements in learning technologies, and government funding, specifically for single and working mothers. In addition, the shift in family structures, such as single-parent households, and the growing recognition of early childhood education’s role in cognitive and social development are further propelling market growth.

Source: Grand View Research, IR Documents, Primary Interviews, Paid Databases

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Market Dynamics

The U.S. child care market is influenced by rising demand for reliable and affordable care, changes in parental employment, and growing awareness of early childhood development. Increasing participation of both parents in the workforce supports demand for full-day and flexible child care services. At the same time, high operating costs, shortages of qualified child care workers, and limited availability of licensed child care spaces continue to affect market supply and affordability. Government subsidies, employer-supported child care programs, and investments in early childhood services are also shaping market development. Overall, the market is characterized by strong underlying demand but supply and affordability constraints, creating opportunities for providers that can offer accessible, flexible, and cost-effective child care solutions.

Driver: High Demand or Child Care & Early Education

The demand for early care and education in states is increasing due to the growth in skilled service areas, such as business & health, indicating the need for quality and accessible childcare & early education. Therefore, ensuring that skilled workers with young children can continue participating in the labor force is important. In addition, it facilitates parents to pursue higher education degrees and specialized training, which is essential to maintain a competitive employment market. A strong childcare and early education infrastructure is crucial for Massachusetts to remain an attractive place to live and work for a skilled workforce.

Moreover, based on the Early Childhood Education and Care Survey 2024 findings, approximately 2,220 children were scheduled to attend childcare and early years settings across Jersey, including government school nurseries, private and not-for-profit day nurseries, private school nurseries, registered childminders, and accredited nannies. This figure shows a slight increase compared to 2023, indicating steady or gradually rising demand for early years and childcare services on the island.

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Restraint: High service costs

High childcare service costs continue to restrain the U.S. child care market by limiting affordability for families and reducing access to formal care. Child Care Aware of America’s July 2025 economic analysis noted that families face costs exceeding commonly cited affordability thresholds, while providers continue to experience low pay and workforce-related pressures. Therefore, high service costs can encourage parents to reduce working hours, change employment arrangements, or rely on informal care, thereby limiting the addressable demand for licensed childcare services and acting as a key restraint on market expansion.

The average annual cost of infant care by state, 2025

State	Average Annual Cost of Infant Care (USD)
Alabama	7,871
Alaska	20,943
Arizona	15,625
Arkansas	8,873
California	21,945
Colorado	21,840
Connecticut	20,254
Delaware	16,220
District of Columbia	28,356
Florida	13,021
Georgia	11,863
Hawaii	21,167
Idaho	9,630
Illinois	16,107
Indiana	14,471
Iowa	9,605
Kansas	9,105
Kentucky	8,756
Louisiana	8,873
Maine	13,310
Maryland	18,946
Massachusetts	26,709
Michigan	10,023
Minnesota	22,569
Mississippi	6,868
Missouri	13,173
Montana	12,778
Nebraska	14,106
Nevada	15,950
New Hampshire	17,364
New Jersey	18,155
New Mexico	14,244
New York	17,361
North Carolina	11,720
North Dakota	12,373
Ohio	17,071

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Source: TOOTRiS

Opportunity: Expansion of Child Care Facilities in Underserved and Workforce-Intensive Areas

Facility-based expansion is emerging as a significant opportunity in the U.S. child care market, supported by persistent gaps in licensed child care capacity across several regions. According to Child Care Aware of America, the number of licensed child care centers declined by 1% nationally between 2024 and 2025, with supply decreasing in 26 of 43 states with complete data. This shortage is creating opportunities for new, expanded, and employer-linked child care facilities, particularly in underserved and workforce-intensive locations. For instance, Iowa’s Child Care Business Incentive Grant program supported the expansion of Danfoss Power Solutions’ child care facility in Ames, increasing planned capacity from 80 to 164 slots, while a multi-employer child care center in Dubuque added 120 new slots. In addition, in June 2026, the U.S. Joint Economic Committee identified employer-built and retrofitted child care facilities as a potential approach to expanding capacity, with new facilities potentially requiring USD 1-3 million in construction investment. These developments indicate increasing scope for small-format, employer-supported, and purpose-built facilities to address localized capacity shortages and improve child care access for working families.

Challenges: Variance Between Supply and Working-Parent Needs

The mismatch between child care availability and working-parent requirements remains a key challenge for the U.S. child care market. According to CAP, in January 2025, nearly 70% of children under age six had all available parents in the workforce in 2023, sustaining demand for reliable and full-time child care services. However, supply growth has remained limited. According to Child Care Aware of America (2025), the number of family child care homes declined by approximately 12% between 2019 and 2023, while center-based child care supply showed no further growth in 2023 after returning to pre-pandemic levels in 2022. This imbalance is particularly challenging for working families requiring consistent care that matches their employment schedules and locations. The limited expansion of providers relative to workforce participation can increase wait times, reduce access to suitable programs, and encourage parents to modify work arrangements. Consequently, the persistent supply-demand gap is expected to constrain market accessibility and remain a significant challenge for the market.

Market Concentration & Characteristics:

The U.S. child care market is fragmented, with high competition among local, regional, and national providers. The degree of innovation is medium, supported by increasing adoption of digital management solutions. M&A activity remains medium, while regulations have a high impact on market operations. Service expansion is high, and regional expansion remains medium as providers continue to address underserved areas.

Digital tools are increasingly being integrated into child care administration, parent communication, enrollment, and attendance management. Procare Solutions reported in March 2025 Child Care Business Trends Report that daycare-app adoption increased 7% year over year, while more than half of surveyed teachers reported that child care management software made their daily work easier. In addition, Playground introduced predictive enrollment capabilities in July 2025 to help providers forecast enrollment and manage future capacity. These developments indicate growing technology adoption, although digital transformation remains uneven across providers

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M&A activity remains medium, with larger operators using acquisitions to increase center capacity and strengthen geographic coverage. In March 2026, KinderCare reported that its fiscal 2025 center portfolio increased by 27 locations, including 26 acquired centers and 20 newly opened centers, partially offset by 19 permanent closures. This indicates that acquisitions remain an important expansion strategy, although the market continues to include a substantial number of independent providers

Regulations have a high impact on market operations because providers must comply with state licensing, staffing ratios, health and safety standards, background checks, and subsidy-related requirements. In September 2025, New Mexico introduced universal child care beginning November 1, 2025, supported by new rules governing provider participation and reimbursement. The state also issued final universal child care regulations in October 2025, demonstrating how policy changes can directly influence provider operations and market access.

Service expansion is rated high as providers, employers, and community organizations continue adding capacity and broadening access to care. In January 2025, Iowa awarded USD 14 million in grants to businesses for new and expanded child care projects, including onsite and community-based facilities. The program specifically targeted infrastructure development to increase child care availability for employees and local communities.

Regional expansion remains medium, as large providers continue entering underserved markets while expansion is constrained by workforce availability and local operating conditions. In March 2025, KinderCare opened its first early childhood education center in Idaho, entering its 41st state with a facility capable of serving up to 80 children in the Boise area. This expansion illustrates the continued geographic penetration of large providers into previously underserved markets.

Analyst Perspective

The U.S. child care market is expected to witness steady growth, driven by rising demand from working parents, increasing workforce participation, and the need for accessible early childhood services. However, high service costs, workforce shortages, limited child care capacity, and uneven availability across regions continue to constrain market expansion. From an analyst perspective, providers are increasingly focusing on expanding capacity in underserved areas, offering flexible care options, and improving service quality to address changing family needs. Government subsidies, state-level funding programs, and public-private partnerships are also supporting market development and improving affordability for eligible families. Opportunities remain particularly strong for providers serving infants and toddlers, rural and underserved communities, and families requiring care during nontraditional working hours.

Age Group Insights

The school-aged children segment dominated the market, accounting for a revenue share of 41.2% in 2025. Demand for school-age child care remains supported by the need for care during the hours when school is not in session. In October 2025, according to the Afterschool Alliance’s 2025 America After 3 PM survey, parents of 29.6 million school-age children wanted afterschool programs, while only 7 million children were enrolled. The survey found that 22.6 million children would participate if a program were available, highlighting substantial unmet demand for afterschool services. Moreover, unmet demand was particularly high among elementary school students, with 58% of elementary school children not enrolled in an afterschool program expected to participate if a program were available.

The preschooler’s segment is anticipated to grow at the fastest CAGR during the forecast period. Increasing participation in preschool and early learning programs is supporting demand for child care services for children aged 3 to 5 years. In April 2026, according to the National Center for Education Statistics (NCES) 2025 Condition of Education report, the overall school enrollment rate for 3- to 4-year-olds increased from 47% in 2022 to 49% in 2023, indicating continued participation in early childhood education. In addition, Head Start programs were projected to provide approximately 567,117 preschool slots in FY 2025, demonstrating continued institutional demand for preschool services. The expansion of early learning programs, growing emphasis on school readiness, and increasing participation of young children in formal education are expected to support demand for preschool child care services during the forecast period.

Type Insights

The early education & early daycare segment dominated the market, accounting for a revenue share of 45.8% in 2025, and is expected to grow at the fastest CAGR from 2026 to 2033. Growth is supported by rising demand for early learning and greater focus on school readiness. In 2025, Massachusetts expanded its Commonwealth Preschool Partnership Initiative (CPPI) to 23 Gateway Cities and seven other communities, supporting access to high-quality, affordable preschool programs. The initiative supported 2,235 children in FY 2025, highlighting continued state investment in early education and daycare services.

The early care segment is expected to have substantial growth over the forecast period. It is emerging as an essential aspect for parents and the government since it provides a safe and nurturing environment for them to grow & learn. High-quality early care can have long-lasting positive effects on children's cognitive, social, and emotional development, and can even lead to better outcomes in adulthood.

Delivery Type Insights

The organized care facilities segment held the largest revenue share of 85.0% in 2025 and is expected to grow at the fastest CAGR during the forecast period. Growth is supported by increasing demand for structured child care and expansion of center-based capacity. In January 2025, the Child Care Workforce and Facilities Act was introduced in the U.S. Senate to support the construction, expansion, and renovation of center-based child care facilities, particularly in child care deserts. In addition, the federal Head Start program was estimated to fund 746,683 early childhood slots through approximately 1,984 awards in FY 2025, highlighting the continued scale of organized early childhood services.

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The home-based settings segment is expected to grow at a significant CAGR during the forecast period. This is driven by increasing demand for flexible, personalized, and community-based child care options, particularly among families seeking care closer to home or outside conventional center-based schedules. Rising child care costs also encourage some parents to consider family child care homes and other small-scale providers, which can offer smaller group sizes and potentially lower operating costs.

State Insights

Texas held the largest market share of 7.3% in 2025. Strong demand is supported by the state’s large working-family population and persistent gaps in affordable child care. In August 2026, Texas lawmakers allocated USD 100 million to the child care scholarship program to support additional access for families. However, rising child care costs quickly depleted the funding, with more than 100,000 children waiting for scholarships by 2026.

Massachusetts is expected to register the fastest CAGR during the forecast period. The state’s child care market is expanding through increased provider capacity and availability of licensed services. As of November 2025, Massachusetts had 7,658 more licensed and funded child care seats than in November 2024. Moreover, licensed and funded capacity increased by 18% since 2022, reaching capacity to serve more than 263,000 children by October 2025. The number of newly opened programs also exceeded closures, indicating continued expansion of the state’s child care infrastructure.

Regional Insights

Midwest region dominated the market with a revenue share of 25.5% in 2025 and is expected to grow at the fastest CAGR from 2026 to 2033. Growth is supported by rising government investments, expansion of child care capacity, and initiatives aimed at improving access for working families. For instance, Illinois allocated USD 200 million through Smart Start Workforce Grants in FY2025, supporting more than 4,000 child care programs. In addition, Illinois reported that state investments had supported the creation of more than 11,000 new early childhood seats since 2023. In addition, Minnesota awarded USD 6.1 million in Child Care Economic Development Grants in 2025, expected to create more than 1,400 new child care slots, including 1,337 slots in Greater Minnesota. These investments are expected to strengthen child care infrastructure and support market growth across the Midwest.

The West region is expected to witness substantial growth during the forecast period, registering a 7.9% CAGR from 2026 to 2033. Growth is driven by population expansion, increasing workforce participation, and rising demand for accessible and affordable child care services. In addition, government investments in early childhood education, child care subsidies, and expansion of provider capacity are expected to improve service availability across the region. Increasing demand from working families and continued efforts to address child care shortages are further expected to support regional market growth.

Key U.S. Child Care Company Insights

Key companies in the U.S. child care market include large national operators such as Bright Horizons Family Solutions, KinderCare Education, and Learning Care Group, alongside regional providers such as Goddard Systems, Primrose Schools, and Childtime Learning Centers. These players operate through a mix of corporate-owned centers, franchised models, and employer-sponsored programs, catering to the rising demand for early education and full-day care. Their competitive strength lies in offering structured curricula, technology integration for parent engagement, and adherence to safety and regulatory standards. In addition, many are expanding through acquisitions and partnerships with employers to address growing workforce needs for reliable and high-quality services.

Key U.S. Child Care Companies:

• Bright Horizons Family Solutions

• KinderCare Learning Centers LLC.

• Learning Care Group, Inc.

• Spring Education Group

• Cadence Education

• The Learning Experience

• Childcare Network

• Kids 'R' Kids

• Primrose Schools

• Goddard Systems

• BrightPath Kids

• Winnie, Inc.

• New Horizon Academy

• Care.com

• NeighborSchools, Inc.

• SitterTree., LLC

Recent Developments:

• In June 2026, Cadence Education acquired Especially for Children, adding nine early childhood education schools across the Minneapolis-St. Paul metropolitan area. The acquisition expanded Cadence Education’s national network to 350 schools, strengthening its presence in the child care and increasing access to early childhood education services.

• In January 2025, The Department of Defense (DOD) launched a comprehensive Child Care Expansion Initiative to enhance access and affordability of child care for military and civilian families serving the armed forces. Recognizing that on-base child development centers alone cannot meet demand particularly for geographically dispersed service members, the initiative broadens care options through partnerships with nonprofit organizations to open new centers in high-demand areas, such as Norfolk, Virginia with additional facilities planned in Northern Virginia and Virginia Beach accommodating about 200 children.

• In September 2025, Chroma Early Learning Academy expanded its presence in Metro Atlanta through the acquisition of three child care centers—Premier Learning Academy, Kids Tech Academy, and Discovery Point Midway. The acquisitions increased its network to 16 campuses serving more than 2,400 families, reflecting continued consolidation and expansion among child care providers.

U.S. Child Care Market Report Segmentation

This report forecasts revenue growth, country level and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033 For this study, Grand View Research has segmented the U.S. child care market report based on type, age group, delivery type, state, and region.

• Type Outlook (Revenue, USD Million, 2021 - 2033)

  • Early Care

  • Early Education & Early Daycare

  • Backup Care

  • Others

• Delivery Type Outlook (Revenue, USD Million, 2021 - 2033)

  • Organized Care Facilities

  • Home-based Settings

• Age Group Outlook (Revenue, USD Million, 2021 - 2033)

  • Infants

  • Toddlers

  • Preschoolers

  • School-aged Children

• State Outlook (Revenue, USD Million, 2021 - 2033)

  • Massachusetts

  • New Jersey

  • Connecticut

  • Texas

  • South Carolina

  • Georgia

• Region Outlook (Revenue, USD Million, 2021 - 2033)

  • West

  • Southeast

  • Southwest

  • Midwest

  • Northeast

Research Methodology

The U.S. child care market figures in this report are based on a proven research process that combines executive interviews with secondary research from proprietary databases, company filings, and recognized regulatory and institutional sources. Market size is built through value-chain sizing—reconciling supply-side and demand-side estimates—and triangulated with bottom-up and top-down approaches. Every estimate passes multiple levels of expert validation before publication, with each U.S. child care segment quantified using the revenue-capture definitions in the table below.

Estimation Model

Model Details

This research methodology outlines the process for estimating the size of the U.S. child care market from 2021 to 2033. The study covers key child care types, including Early Care, Early Education & Early Daycare, Backup Care, and Others. It also evaluates delivery types comprising Organized Care Facilities and Home-based Settings, age groups including Infants, Toddlers, Preschoolers, and School-aged Children, and selected state markets including Massachusetts, New Jersey, Connecticut, Texas, South Carolina, and Georgia, along with the Rest of the U.S.

The objective is to develop a robust and defensible market estimate by combining bottom-up and top-down approaches, supported by primary industry validation.

A triangulated market sizing approach was used, combining:

• Bottom-Up Analysis based on the number of child care providers and facilities, licensed capacity, enrollment, child care attendance, utilization rates, average tuition, average spending per child, operating hours, and provider-level revenues.

• Top-Down Analysis using U.S. child care expenditure, household spending, workforce participation, child population, child care enrollment, government child care subsidies, employer-sponsored care, household income, and overall early childhood education spending.

• Primary Research with child care center operators, owners, administrators, franchisees, early childhood educators, state child care officials, workforce development organizations, industry consultants, and other market participants.

Step-by-Step Market Estimation Process

• Child Care Enrollment and Revenue Model

This model estimates the market size based on the number of children receiving paid child care services and the average revenue generated per child.

Step 1: Facility-level data on child care providers operating in the U.S. from 2021 to 2025 were collected from state licensing databases, child care provider directories, government databases, industry associations, company disclosures, annual reports, and other industry sources.

Step 2: Child care enrollment and attendance were estimated using licensed capacity, enrollment rates, utilization rates, child population, provider disclosures, child care participation statistics, and primary interviews.

Step 3: Average revenue per child was estimated using monthly and annual tuition rates, hourly care charges, enrollment fees, program fees, age-specific pricing, geographic pricing differences, and provider-level benchmarks.

Step 4: Market size was calculated using:

Number of Children in Paid Child Care × Average Revenue per Child

or

Child Care Enrollment × Average Annual Child Care Spending per Child

Step 5: Provider-level estimates were aggregated to calculate state-level and national market values.

Step 6: Historical and forecast growth rates were incorporated based on child population trends, workforce participation, household income, child care affordability, provider capacity, tuition inflation, demand for early education, government support programs, and expansion of child care facilities.

• Child Care Provider Revenue Extrapolation Model

This model estimates the market size based on revenues generated by child care providers across the U.S.

Step 1: The number of active child care providers and facilities was identified using state licensing databases, provider directories, government databases, company disclosures, franchise networks, and industry sources.

Step 2: Providers were classified by facility type, operating model, geographic location, capacity, and service offering.

Step 3: Average annual revenue per child care provider was estimated using enrollment, licensed capacity, utilization rates, tuition rates, operating days, ancillary fees, and provider financial disclosures.

Step 4: Market size was calculated using:

Number of Child Care Providers × Adjusted Average Annual Revenue per Provider

Step 5: Provider-level revenues were aggregated to determine the overall U.S. child care market size.

Step 6: Annual adjustments were applied to account for new facility openings, provider closures, capacity additions, tuition increases, acquisitions, franchise expansion, changes in enrollment, and shifts in child care demand.

• Child Care Type Revenue Model

This model estimates market size based on revenue generated across major child care service types.

Step 1: Child care services were categorized into:

• Early Care

• Early Education & Early Daycare

• Backup Care

• Others

Step 2: Enrollment, utilization, provider capacity, pricing, and service volumes were estimated for each child care type using government data, provider disclosures, industry databases, tuition surveys, and primary interviews.

Step 3: Average revenue per child or service transaction was estimated for each category based on tuition rates, hourly charges, enrollment fees, program fees, employer-sponsored arrangements, and other service charges.

Step 4: Revenue generated by each child care type was calculated using:

Child Care Type Enrollment × Average Revenue per Child

or

Number of Service Users × Average Revenue per Service User

Step 5: Revenues across all child care types were aggregated and reconciled with total market revenues to determine the overall market size.

Step 6: Forecast assumptions incorporated increasing demand for early childhood education, working-parent participation, demand for flexible care, employer-sponsored backup care, child care capacity expansion, and changes in household spending on child care.

• Delivery Type-Based Market Estimation

The market was further assessed based on the delivery model through which child care services are provided.

Step 1: Child care services were classified into:

• Organized Care Facilities

• Home-based Settings

Step 2: The number of providers, licensed capacity, enrollment, and revenues associated with each delivery type were estimated using state licensing records, provider databases, household surveys, company disclosures, and industry research.

Step 3: Average revenue per child and average revenue per provider were calculated separately for organized facilities and home-based settings.

Step 4: Segment revenue was calculated using:

Segment Enrollment × Average Revenue per Child

or

Number of Providers in Segment × Average Revenue per Provider

Step 5: Delivery-type estimates were cross-checked against the total U.S. child care market to ensure consistency and avoid double counting.

Step 6: Forecast assumptions considered the expansion of organized child care centers, growth of family child care homes, changes in household preferences, provider availability, workforce participation, and demand for flexible child care arrangements.

• Age Group Revenue Model

This model estimates market revenues based on the number of children receiving child care across different age groups.

Step 1: Children receiving child care were classified into:

• Infants

• Toddlers

• Preschoolers

• School-aged Children

Step 2: Age-specific enrollment and participation rates were estimated using child population data, childcare participation statistics, provider enrollment information, government databases, and primary research.

Step 3: Average annual spending per child was estimated for each age group based on tuition rates, care requirements, program duration, facility type, and geographic pricing.

Step 4: Segment revenue was calculated using:

Number of Children in Age Group × Average Annual Child Care Spending per Child

Step 5: Age-group revenues were aggregated and reconciled with total market revenues.

Step 6: Forecast assumptions incorporated changes in birth rates, child population, parental workforce participation, preschool enrollment, school schedules, demand for infant care, and increasing demand for before-school and after-school programs.

• State-Level Market Estimation

This model estimates the market size across selected U.S. states and the Rest of the U.S.

Step 1: The market was segmented into:

• Massachusetts

• New Jersey

• Connecticut

• Texas

• South Carolina

• Georgia

• Rest of U.S.

Step 2: State-level data on child population, child care enrollment, number of providers, licensed capacity, utilization, average tuition, household spending, and workforce participation were collected from state agencies, U.S. government databases, provider databases, industry sources, and primary research.

Step 3: Average revenue per child and provider was estimated separately for each state based on local tuition levels, child care demand, provider density, household income, operating costs, and utilization rates.

Step 4: State-level market revenue was calculated using:

Number of Children Receiving Paid Care × Average Annual Spending per Child

or

Number of Providers × Average Annual Revenue per Provider

Step 5: State-level estimates were aggregated to determine the total U.S. child care market.

Step 6: Forecast adjustments were applied based on state-specific child population trends, workforce participation, child care capacity expansion, tuition growth, government funding, employer-sponsored programs, and changes in household demand.

• Market Validation and Forecasting

The estimates derived from the child enrollment and revenue model, provider revenue extrapolation model, child care type model, delivery type model, age group model, and state-level model were cross-validated through data triangulation. Findings were further verified through primary interviews with child care center operators, facility owners, administrators, franchise operators, early childhood educators, state child care officials, industry consultants, and other market participants. Final market forecasts were developed by evaluating child population trends, workforce participation, household income, child care enrollment, provider capacity, average tuition, child care affordability, government subsidies, employer-sponsored child care, and overall household spending.

Forecast assumptions also considered the increasing participation of women and dual-income households in the workforce, continued demand for infant and toddler care, expansion of organized child care facilities, growth of home-based care, increasing demand for flexible and backup care, and investments in early childhood education. The model further considered child care provider expansion, franchise development, consolidation among providers, capacity additions, tuition increases, state-level child care initiatives, employer-sponsored programs, and changes in child care workforce availability through 2033.

Delivered Customizations

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