How does North Dakota compare on childcare affordability?
The lack of affordable childcare is a national issue. Some states, however, have it worse than others. So, how does North Dakota compare?
According to ChilCare Aware, in 2022, parents in North Dakota spent a little under $10,000 to send their infant to a licensed daycare center. This was 14 percent of the state’s median household income, making North Dakota the eighth most affordable state for center-based infant care — California not included.
Among its neighbors, North Dakota came second to South Dakota, which was the most affordable state in the country and fared better than both Minnesota — one of the least affordable states in the country — and Montana, which ranked in the middle.
Figure 1: Annual cost of center-based infant care as a percent of median household income, 2022
Similarly, for toddlers, parents spent $9,325, or 13 percent of the state median household income, making North Dakota the sixth most affordable state for center-based toddler care. For 4-year-olds, parents spent about $9,000 or 12 percent of the state median household income, making North Dakota the 13th most affordable state in the country.
More can be done to improve affordability
Certainly, the economics of childcare are challenging. However, that is as true in North Dakota as it is in Minnesota or Montana. So, something else explains the differences in the cost of childcare among states. Indeed, a closer analysis reveals that North Dakota imposes less stringent regulations on childcare centers, which explains some of this difference.
For instance, while both North Dakota and Minnesota require one caregiver per every four infants, the former has a higher group size limit. Similarly, both Minnesota and North Dakota allow up to 10 kids per caregiver for 4-year-olds. However, North Dakota allows up to 25 children per group, compared to 20 in Minnesota. Moreover, Minnesota requires childcare workers to have a high school diploma and take thousands of hours of work experience while North Dakota only requires pre-service training. These differences make it easier for centers to find workers in North Dakota compared to Minnesota.
The relationship between regulations and has been heavily documented in a lot of studies. A report published in 2022 by Center of the American Experiment, found, for example, that among North Dakota and its three neighbors, South Dakota had the least stringent rules — on staff-child ratios, group size limits, and teacher hiring requirements — for center-based childcare. Minnesota was the most stringent, followed by Montana and then North Dakota. The cost of care also followed the same pattern, suggesting a causal relationship. Using a regression analysis, the study estimated that overall, a one-point increase in a state’s regulatory score was associated with a $1,658 increase in the annual cost of center-based infant care.
While ND is a relatively affordable state, more can be done to improve the cost of care. Lawmakers could, for example, consider allowing more infants and toddlers. Children between 12 and 18 months while they are classified as toddlers use an infant-staff ratio of four to one. This could be changed as well to allow those kids to be in bigger groups, saving parents money.