Why is Gen Z delaying having kids?

• Following reports of a “historic low” for the U.S. general fertility rate in 2023, a new study reveals the shocking costs of childcare in each U.S. state, one of the many economic factors causing birth rates to decline.
• In Nevada alone, parents spend almost 30% of their median annual income on childcare.
• Parents in Mississippi spend the lowest amount on childcare out of all states, but this is still over 10% of their income.

Recent reports reveal that Gen Z Americans are more likely to delay having kids due to economic reasons than millennials, with childcare costs playing a major role. In light of this, a new study by real estate company New Jersey Real Estate Network reveals which states are spending the highest percentage of their income on childcare.

The study analysed data from the National Database of Childcare Prices and the Bureau of Labor Statistics for 2023 to determine which states have the most and least affordable childcare relative to median income. 

According to the findings, families in Massachusetts face the steepest childcare costs compared to their income, spending 30.29% of their median annual earnings of $60,690 on childcare. The average centre-based childcare price in Massachusetts was found to be $18,380 per year. 

New York follows closely behind in second place, with families spending 30.12% of their median income on childcare. Families in the Empire State pay an average of $17,119 annually for childcare against a median income of $56,840. 

Nevada ranks third among states where childcare costs consume the largest portion of family income. Nevada parents spend 29.25% of their median income of $44,810 on childcare services, paying an average of $13,106 per year. 

Hawaii and Minnesota complete the top five most expensive states for childcare costs relative to income, with families spending 28.87% and 28.37% of their income, respectively. 

States where families spend the highest percentage of income on childcare

Rank	State	Average centre-based price (2023)	Median Annual Income	% Spend on Average childcare
1.	Massachusetts	$18,380	$60,690	30.29%
2.	New York	$17,119	$56,840	30.12%
3.	Nevada	$13,106	$44,810	29.25%
4.	Hawaii	$14,584	$50,510	28.87%
5.	Minnesota	$14,435	$50,880	28.37%
6.	California	$15,112	$54,030	27.97%
7.	Wisconsin	$12,990	$47,590	27.30%
8.	Connecticut	$15,063	$56,130	26.84%
9.	Vermont	$13,030	$49,630	26.25%
10.	Oregon	$12,738	$50,010	25.47%

The study found infant care to be particularly costly in Hawaii, where parents spend 41.95% of their income on centre-based infant care. The cost of infant care in Massachusetts was also substantial, requiring 38.21% of median income. 

At the other end of the scale, Mississippi ranked as the most affordable state for childcare, with families spending just 12.36% of their income. The annual total cost for childcare in Mississippi is $4,636 against a median annual income of $37,500. 

Kansas placed second from the bottom, with families spending 16.03% of their income on childcare. South Dakota followed closely as the third most affordable state, with childcare costs consuming 16.29% of median income.

States where families spend the lowest percentage of income on childcare

Rank	State	Average centre-based price (2023)	Median Annual Income	% Spend on Average childcare
47.	Mississippi	$4,636	$37,500	12.36%
46.	Kansas	$7,256	$45,250	16.03%
45.	South Dakota	$7,115	$43,680	16.29%
44.	Kentucky	$7,414	$43,730	16.95%
43.	Arkansas	$6,704	$39,060	17.16%
42.	Wyoming	$8,198	$47,250	17.35%
41.	Idaho	$7,688	$44,240	17.38%
40.	Tennessee	$7,625	$43,820	17.40%
39.	Alabama	$7,392	$41,350	17.88%
38.	North Dakota	$8,782	$48,830	17.98%

A spokesperson from New Jersey Real Estate Network commented on the findings: 

“These statistics show that childcare costs vary dramatically across the United States, creating significant financial pressure for families in certain regions. Parents in Massachusetts face the greatest burden, spending nearly a third of their income just on childcare. 

“The data highlights a clear contrast between the Northeast and the Southern states. Four of the top 10 states with higher childcare costs are in the Northeast, while all the 10 more affordable states are in the Midwest or South.”