The Escalating Cost of Care Services

Nancy Folbre
18 August 2022
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Price of three major care services–day care and preschool, nursing homes and adult daycare, and medical care services, have risen much faster since 1998 than the price of the “all items” basket of goods and services that serves as the primary benchmark for analysis of inflation

So much talk about inflation–but not much about its disparate impacts. Nor do differences in the rate of price increases between “necessities” and “luxuries” get much attention.  Data that I downloaded from the  Data Finder  of the U.S. Bureau of Labor Statistics  shows that price of three major care services–day care and preschool, nursing homes and adult daycare, and medical care services, have risen much faster since 1998 than the price of the “all items” basket of goods and services that serves as the primary benchmark for analysis of inflation (See graph).

This is not entirely surprising. All three services are difficult to standardize or fully commodify because they are based on personal engagement and customized attention.

Further, improvements in the quality of the services provided aren’t captured in the aggregate price trends. In the past, reliance on relatively inexpensive imports of manufactured goods helped reduce pressure on prices in the “all items” basket, an effect probably greater than the effect of immigration on the supply of childcare workers. Also, many care services are at least partially subsidized by the government.

But think about the implications: families with a young child, ailing elder, or anyone suffering illness or disability are faced with higher prices than those unencumbered by responsibilities for dependent care. They are especially vulnerable to the escalating cost of care services if both adults are employed and they lack adequate health care insurance.

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