Child-care policy is left to state governments and wide variation exists regarding policies and subsidies to assist poorer families with these costs. Overall, data from the Organization for Economic Cooperation and Development (OECD) suggest U.S. out-of-pocket child-care costs for a lone parent working full-time are higher as a percentage of earnings than in any other OECD country. And there is less taxpayer support for U.S. child care than in other OECD countries.
This high cost can have a large negative effect on the poor and can fuel political demands for increased government intervention and spending on child care. Empirical research indicates that parents (poorer single mothers especially) are particularly sensitive to child-care prices when making decisions about entering the labor market. Evidence from a range of studies suggests mothers from poorer families and those with low levels of educational attainment are least likely to be working.