Top 10 States to Operate a Childcare Business

To rank the Top 10 States to operate a childcare business, 45 states were scored on eight metrics in 2 categories. The categories include affordability and program-to-child ratio. Each category is weighted based on how well each state has done and can earn a maximum of 157 points. Some states lacked the necessary data; therefore, Maine, Nevada, New Mexico, Oregon, and Washington were omitted. The primary sources used to gather data are the US Census BureauThe National Center for Education Statistics, and Childcare Aware of America.

The affordability percentage was calculated using the average childcare expense by region and the median income by state. After calculating affordability for the average household per state, childcare expenses exceeded 20% of the average household budget by state. The U.S. Department of Health and Human Services recommends that childcare expenses not exceed 10 percent of the household budget.

According to the national center for education statistics, 59% of children five or younger were in a nonparental care arrangement. The program-to-child ratio was calculated based on the number of childcare programs (home and center) by state, the number of children under age five by state, and the percentage of children in nonparental care. The top 10 states to start or operate a childcare business starting with number 10 include:

10. Florida (FL)
  • Affordability: 35
  • Program-to-child ratio: 22
  • Total Score: 57

Florida, Alaska, and California tied at number ten with a score of 57. Alaska and California scored higher in affordability, and Florida scored higher in program-to-child ratio. Florida has a population of 1,141,524 children under five, with an estimated 673,499 in nonparental care. The median income for a household in FL is $57,703, with 34% used towards childcare expenses. The program-to-child ratio 1:69.

9. Illinois (IL)
  • Affordability: 40
  • Program-to-child ratio: 18
  • Total Score: 58

Illinois comes in at number nine with a population of 755,938 children under age five, with an estimated 446,003 in nonparental care. The median income in Il is $68,428, with 32% going towards childcare expenses. The program-to-child ratio is 1:57.

8. New Jersey (NJ)
  • Affordability: 40
  • Program-to-child ratio: 22
  • Total Score: 62

New Jersey comes in at number eight with a population of 538,762 children under age five, with an estimated 317,869 in nonparent care. The median household income in NJ is $85,245, with 32% used for childcare expenses. The program-to-child ratio is 1:67.

7. Hawaii (HI)
  • Affordability: 50
  • Program-to-child ratio: 14
  • Total Score: 64

Hawaii comes in at number seven with a population of 90,227 children under five, with an estimated 53,234 in nonparent care. The median household income in HI is $83,173, with 27% being used for childcare expenses. The program-to-child ratio is 1:46.

6. Louisiana (LA)
  • Affordability: 25
  • Program-to-child ratio: 42
  • Total Score: 67

Louisiana comes in at number six with a population of 302,754 children under five, with an estimated 178,625 in nonparental care. The median household income in LA is $50,800, with 38% used for childcare expenses. Louisiana has one of the highest affordability percentages, but the program-to-child ratio is 1:126.

5. Georgia (GA)
  • Affordability: 40
  • Program-to-child ratio: 28
  • Total Score: 68

Georgia comes in at number five with a population of 664,138 children under five, with an estimated 391,842 in nonparental care. The median household income in GA is $61,224, with 32% used for childcare expenses. Georgia\’s program-to-child ratio is 1:88.

4. Utah (UT)
  • Affordability: 45
  • Program-to-child ratio: 42
  • Total Score: 87

Utah comes in at number four with a population of 258,458 children under five, with an estimated 152,490 in nonparental care. The median household income in UT is $74,197, with 30% used for childcare expenses. Utah\’s program-to-child ratio is 1:127.

3. Virginia (VA)
  • Affordability: 55
  • Program-to-child ratio: 36
  • Total Score: 91

Virginia comes in at number three with a population of 517,884 children under five, with an estimated 305,551 in nonparental care. The median household income in VA is $76,398, with 25% of income used for childcare expenses. Virginia\’s program-to-child ratio 1:110.

2. Texas (TX)
  • Affordability: 45
  • Program-to-child ratio: 52
  • Total Score: 97

Texas comes in at number two with a population of 2,040,185 children under the age of five, with an estimated 1,203,709 in nonparental care. The median household income in TX is $63,826, with 30% used for childcare expenses. Texas program-to-child ratio is 1:158.

1. Colorado (CO)
  • Affordability: 45
  • Program-to-child ratio: 102
  • Total Score: 147

Colorado comes in at number one with a population of 3,350,875 children under the age of five, with an estimated 1,977,016 in nonparental care. The median household income in CO is $75,231, with 30% being used towards childcare expenses. Colorado\’s program-to-child ratio is 1:306.

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