The cost of child care has risen so high in recent years that some parents can’t afford to work.

As of September, the average household spent more than $700 a month on child care, up 32% from 2019, according to a recent report from the Bank of America Institute. The sharply higher costs are driving some parents to leave the workforce in order to look after their children.

At the same time, many families laying out for child care are having to tap their savings while down on spending, potentially weighing on economic growth, BofA noted.

“While our data only captures payrolls deposited into Bank of America accounts and might not paint the full picture, we think the [spending] decline still points to the possibility of some working parents leaving the workforce as child care prices rise rapidly,” the report states.

Child care costs refer to the out-of-pocket expenses parents pay for their child to attend daycare or to hire a babysitter or nanny. The costs typically fall or disappear once a child enters preschool or kindergarten around ages 3 or 5.

The U.S. economy loses an estimated $122 billion a year when parents leave work or reduce their hours in order to stay home with young children, a February study from ReadyNation found.

Inflation has driven up child care costs, while a loss in federal funding last month is also taking a toll. The 2021 American Rescue Plan Act (ARPA) directed nearly $40 billion to child care centers nationwide to help them stabilize their business during the pandemic while keeping prices lower for parents. But those funds expired on September 30.

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