In recent years the cost of childcare has skyrocketed in Massachusetts, contributing to the state being one of the least affordable places to raise a child in the country. At the center of the problem are three structural issues: rigid unnecessary government regulations that seek to ensure quality and safety but oftentimes significantly increase costs and decrease the supply of providers without a proportional benefit; high labor costs and the inability to increase the productivity of workers limiting the profitability of providers; and the demands of high income parents to outfit providers with every available perk. State policymakers often see subsidies as the best solution, but while transferring the cost to taxpayers subsidies do little to address the structural supply constraints at the crux of the affordability crisis.

As the initial economic recovery from the COVID-19 pandemic has slowed, a new study from Pioneer Institute finds that governments must continue to provide short-term relief to stabilize small businesses as they simultaneously consider longer-term reforms to hasten and bolster recovery – all while facing a need to shore up public sector revenues.