The number of child care centers in Colorado has significantly decreased in the aftermath of the COVID-19 pandemic, according to a new report from the Committee for Economic Development.

That comes as the number of children in paid child care throughout the state has remained steady over the past few years, with a slight increase in the number of children under five in child care.

In Colorado, the overall share of children age 14 and younger averaged 20.3 percent in paid care from 2011 to 2022 and 18.8 percent from 2000 to 2010.

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While Colorado had a slight decrease in the number of children under 14 in child care from 2019 to 2022, it did not see the dramatic downward trends seen in some other states like Michigan.

In 2019, 228,236 children 14 and younger were in child care in Colorado. By 2022, that had dropped just 5 percent to 217,027.

That drop was likely related to a drop in labor force participation by mothers from 2019 to 2022, especially among mothers with children under the age of five.

Income also plays a role in child care. The report found that the “use of paid care is related to family income in Colorado.”

The average income of households with children age 0-14 not using paid care was $162,548 in 2022, while the income of families using paid care was only slightly higher at $179,807.

This comes as Colorado has some of the most-expensive childcare in the nation. According to the Economic Policy Institute, infant care for one child would take up 21 percent of a median family’s income in Colorado, making it “unaffordable” for the average family and “out of reach for low-wage workers.”

The average annual cost of infant care in the state is $15,325, or $1,277 per month. That makes Colorado the eighth most-expensive state in the nation for infant care.

With such a high percentage of the state’s children in paid care, it means the child care industry remains an important part of the state’s economy.

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“The data presents a compelling case for viewing child care as critical economic infrastructure," said Cindy Cisneros, vice president of CED. “States with better child care access show higher workforce participation, higher household incomes, and lower poverty rates—demonstrating that investments in child care yield significant returns for both families and the broader economy.”

In Colorado, the child care industry generated a record $1.3 billion in revenue in 2022 while directly employing 23,000 workers.

Downstream from the industry, its economic activity triggered an additional $1.7 billion and 11,913 jobs in other spillover industries.

Yet, the industry did see a significant decline in centers throughout the state following the pandemic.

Between 2019 and 2022, the number of child care centers decreased by 131, while the number of home-based child care businesses decreased by 588. As of 2022, that left 7,985 child care businesses open in Colorado.

Even with this decline in centers and slight decline in families participating, wages did increase in the industry (by 31.4 percent) over that same period.

An influx of pandemic funding from the federal government likely played a role in that, when, between March 2020 and March 2021, Congress provided $626.8 million in supplemental child care funding to Colorado to “enable programs to remain open with a reduction in child enrollment.”

It’s unclear what will happen to the industry now that the money is gone, which happened in September.

“At this time, it is not possible to know if these industry gains will remain after the supplemental federal child care funding has been spent,” CED reported.

It also is unclear how Colorado’s push of universal preschool, which it began in 2023, will effect the paid child care industry.