The hidden cost of child care: What NH businesses need to know

Kendra Lewis, Ph.D

New Hampshire businesses are facing a workforce challenge that goes beyond wages and hiring. Across the state, nearly 17,300 workers each month are sitting out of the labor market because they can’t find or afford child care, and most NH employers offer little to no paid leave.

These aren’t just family issues; they’re business issues, with measurable costs in turnover, absenteeism and lost productivity. Before we get into how child care costs and parental leave relate to business ownership, let’s first understand the issues.

Child care and preschool

The greatest barrier to families seeking child care is its cost.

The United States Department of Health and Human Services states that for child care to be affordable for families, the cost should be approximately 7% of their income. A study by UNH’s Carsey Institute found that in 2023 the cost of full-time center-based care was approximately $32,000, which represented 28% of the median household income in NH.

For families to meet the 7% threshold, their income would need to be over $450,000 annually. Although the Child Care Scholarship Program has helped nearly 4,000 families access care, the program does not meet all the unique needs and situations of Granite Staters and still leaves many families unable to participate in the labor force.

In addition to the high costs, availability of child care and preschool programs also contributes to a caregiver’s ability to work. In 2025, few preschool programs offered full-time (full-day and/or full-week) programming, and summer programming is also limited.

Paid family and medical leave

Lack of paid parental leave can also impact a caregiver’s ability to stay in the workforce. The United States lacks a paid federal leave option for employees. Through the Family and Medical Leave Act, workers can get up to 12 weeks unpaid leave, if they have worked over 1,250 hours in the previous year and work for an employer with 50 or more employees. Over 60% of workers in New Hampshire do not qualify for leave under FMLA.

The economic impact

A U.S. Census Bureau survey found that, in 2024, over 17,000 potential NH employees were not in the labor force because they cared for children. When caregivers cannot work due to child care, they cannot contribute financially to the local and state economies.

The New Hampshire Fiscal Policy Institute estimates that, in 2023, if there had been available child care for every child that needed it, the state’s business revenues would have increased by $55 million, and local and state tax revenue would have increased by $14 million.

When workers and families lose wages, they also lose their spending power and the money contributed back into the economy. Offering paid leave can help businesses retain employees; according to the Council of Economic Advisers, workers with paid leave report increased productivity and higher levels of employee satisfaction.

What can businesses do?

Child care and parental leave access are societal issues that can’t be left up to individuals and families to solve on their own; businesses, communities and governments must be involved as well.

NH has invested in child care through the NH Child Care Scholarship. This scholarship reduces the cost of child care for families, and recent eligibility has changed, making the scholarship available to even more families. Participation doubled from the time of implementation of the changes (January 2024) to December 2025, with nearly 6,000 children enrolled.

Businesses can help raise awareness of the scholarship, and if possible, help employees navigate the enrollment process. Employers can also offer child care assistance through subsidies, on-site care or back-up care options — providing child care options can also make a business eligible for tax credits.

In 2023, NH rolled out the voluntary Paid Family & Medical Leave Plan. This program is available through employers purchasing insurance for their employees, sharing cost with employees, or employees may purchase it on their own. A benefit of this program is that employers with fewer than 50 employees can participate — approximately 96% of employers in NH fall in this category.

Despite being around for three years, enrollment is low (only about 2.5% of workers) and less than 20% of workers know about it. Businesses of all sizes should consider this program as an option for their employees, and even if they do not choose to offer a plan to workers, ensure that workers are aware of the program and that they can enroll as an individual. Hybrid, remote and flexible work hours can also support families, particularly to accommodate center or school dropoff/pickup times or when a child is ill.

Whatever you choose to offer as a business, start by talking to your employees and getting to know their needs. Smaller businesses will be limited in what they can provide; think about your benefits as a whole. Do your current benefits match the needs of your employees?

The data is clear. Child care access and paid leave directly affect whether people can show up, stay employed and remain productive. For NH employers, the gap between what workers need and what’s currently available represents both a challenge and an opportunity.

Businesses that act to support families are better positioned to recruit and retain workers in a tight labor market. The solutions don’t require large budgets; they require awareness and a willingness to treat workforce stability as a business priority.

Kendra Lewis, Ph.D., is a state specialist for 4-H Youth Development at UNH Extension, with expertise in early childhood development and well-being programming for NH residents of all ages.