A new analysis from the Common Sense Institute (CSI) and the U.S. Chamber of Commerce Foundation paints a stark picture of the growing childcare crisis in Arizona and the mounting economic costs tied to it.
The report finds that the state’s shrinking supply of licensed childcare providers is forcing families to make difficult tradeoffs, reducing workforce participation, and limiting Arizona’s long-term economic growth.
Despite Arizona’s rapid population growth over the last 20 years, the number of licensed childcare providers has nearly been cut in half, dropping from more than 5,100 providers in 2002 to just under 2,800 today. That contraction has collided with higher labor and operating costs, making quality childcare increasingly hard to find and afford.
A business community leader says the findings confirm what employers have been experiencing first-hand.
“This report reinforces what employers across Arizona already know: childcare shortages limit workforce participation and hold back economic growth,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “Expanding access to quality care is one of the most practical ways Arizona can strengthen its workforce and stay competitive in a fast-growing economy. We hope this study will serve as a roadmap for policymakers to pursue solutions that support working parents and the employers who rely on them.”
The Chamber has long emphasized the connection between reliable childcare and a strong, stable workforce. With Arizona employers facing tight labor markets and intense national competition, business leaders view the sector as a critical component of the state’s economic infrastructure.
A system under strain
The report highlights a statewide gap of up to 87,800 licensed childcare slots for children under six. Shortages are even more severe in some communities:
- In Maricopa County, licensed providers can accommodate only 13% of infants.
- In Santa Cruz County, that figure drops to just 1%.
Families that do secure a spot face rapidly rising costs. The average price of licensed infant care in Arizona has surged 42% since 2018 and now averages $61 per day. For lower-income families, that means working the equivalent of 90 hours per month just to cover childcare for one child.
Economic consequences—and opportunities
CSI’s economic modeling underscores the statewide stakes: if Arizona expands access to affordable, quality care, the state could add up to 233,600 new jobs over the next five years and generate between $5.4 billion and $34 billion in additional GDP.
Glenn Farley, CSI’s director of policy and research, said the shortage has broad implications for both families and employers.
“Even as demand remains high, the number of licensed providers has fallen sharply—limiting supply, driving up costs, and constraining labor force participation,” Farley said. “These pressures ripple through the broader economy, reducing productivity and household income. Based on our analysis, expanding access to affordable, quality care is not only good policy, but a necessary step for sustaining long term economic growth in the state.”
cover photo courtesy Creative Commons NonCommercial 4.0 International