Private Equity Blamed for Childcare Crisis? Study Says It Accounts for Only 10%

A new study offers a more nuanced picture of private equity's role in U.S. childcare, finding that private equity-backed providers account for roughly 10% of the childcare workforce, highly concentrated in a small number of U.S. counties.

Researchers found no evidence that private equity is a primary driver of childcare unaffordability, but they did find that private equity-backed providers tend to cluster in counties with tight childcare markets and states with looser staffing regulations.

Strategic Siting and Loose Staffing Rules

The study, authored by Jessica Brown of the University of South Carolina and Chris Herbst of Arizona State University and reported by Vox, shows that private equity's share of the childcare workforce has hovered near 10% since 2010. However, 75% of private equity-backed centers are located in just 5% of U.S. counties, and these providers tend to choose states with lighter staffing oversight.

Brown told Vox: "From what we see, private equity is not the reason childcare is unaffordable." Co-author Herbst noted that while they jokingly considered titling the paper "Much Ado About Nothing," geography still matters, as private equity chains continue to seek out markets with tight supply and flexible labor laws.

Senate Investigation Scrutinizes Investor Profits

The academic findings add key detail to an ongoing legislative probe. U.S. Senator Jeff Merkley, ranking member of the Senate Budget Committee, launched an investigation in March 2026 into large private equity-owned chains such as KinderCare and Learning Care Group, accusing corporate owners of "prioritizing investor profits over the well-being of the families and communities that depend on these services."

Merkley's inquiry aims to determine whether leveraged buyout debt and financial extraction are harming child welfare and tuition affordability.

Quality and Accessibility

Despite public criticism, the study shows that private equity-backed providers perform similarly on price to other large chains and are actually more likely to hold their state's highest quality rating. However, they remain less likely to accept government childcare subsidies.

Herbst told Vox: "It may not be that they're providing low-quality services. They may be providing very high-quality services, but because of where they operate, a lot of families can't access them."

Private equity-backed chains are less likely to accept public subsidies—70% do, versus 78% for other large chains—but are more likely to hold their state's highest quality rating.

Ultimately, researchers found that private equity providers tend to concentrate in profitable markets with tighter childcare capacity and looser staffing rules, while broader systemic factors appear to play a larger role in the affordability crisis.

Broader Scrutiny of Profit-Driven Care Models

The political probe echoes broader alarms across financial markets. Media publisher Hunterbrook Media and its acquired unit The Bear Cave were contacted for comment after publishing scathing short reports targeting operators in the care economy.

The Bear Cave published a short report in June 2025 alleging widespread safety issues at KinderCare Learning Companies Inc., including incidents of children being left unsupervised and alleged abuse.

Hunterbrook Media separately alleged that understaffing at Ensign Group Inc. facilities saved the company approximately $161 million in labor costs over five months, while its analysis found that facilities with larger staffing gaps performed worse on quality and safety metrics.