America's Secret Childcare System Is Worth $900 Billion — and It's Called Grandparents
Think of the last time a grandparent stepped in for a school pickup, stayed with a sick grandchild so a parent could get to work, or quietly slipped money toward a grocery bill or tuition payment. A new report from AARP puts a number on how much all of that adds up to — and it is staggering.
The Numbers
According to the report, titled "Powering Families: The Essential Role of Grandparents in Care, Connection and Support," grandparents collectively contribute an estimated $903 billion to American families and the broader economy each year. That figure is the combination of $731 billion in unpaid childcare and $172 billion in direct financial support.
On an individual level, the average grandparent provides roughly 510 hours of childcare annually — nearly 10 hours per week among those who are actively caring for grandchildren — along with an average of $2,654 in direct financial assistance each year. Spending covers a wide range of needs, from birthday gifts and clothing to school supplies, childcare, family travel and, for some, medical and dental care.
The study was based on a nationally representative survey of more than 3,300 U.S. grandparents age 35 and older, conducted in late 2025, along with qualitative interviews.
The Scope of the Commitment
The U.S. is home to an estimated 65 million grandparents. Of those, 69% provide some level of care for their grandchildren. Fifteen percent care for grandchildren daily or nearly every day, taking on responsibilities that amount to part-time or full-time childcare. Meanwhile, 9 in 10 grandparents provide some form of financial support, with 41% helping cover basic necessities. Only about 1 in 3 grandparents say they don't provide caregiving support at all.
Most say they do it willingly. Eighty-one percent of grandparents report feeling confident in their caregiving abilities, and 75% say they feel appreciated. Seventy percent say there has been no financial sacrifice or strain in providing support.
Why It Matters Now
The report arrives as the cost of formal childcare continues to climb well out of reach for many American families. The average family with children in paid care spends around $750 per child per month — roughly $9,000 a year — according to Bankrate. In high-cost cities, the true cost of care, when factoring in a living wage for providers, can range from $13,000 for a school-age child to more than $40,000 per year for an infant.
Against that backdrop, grandparents have quietly become one of the most essential pillars of the childcare system. AARP EVP and Chief Public Policy Officer Dr. Debra Whitman put it plainly: "America runs on grandparents. Grandparents are one of the most important — and often overlooked — sources of support for American families. Through both unpaid caregiving and direct financial assistance, they help parents stay in the workforce, make ends meet, and navigate rising childcare costs."
The Geography Factor
Where a grandparent lives has a significant impact on how much care they're able to provide. Nearly half of grandparents surveyed have at least one grandchild living nearby, which makes regular participation in childcare and family life more practical. Those who live at a distance find ways to contribute financially even when hands-on care isn't possible.
The average grandparent has five grandchildren, and nearly 1 in 4 say at least one grandchild is multiracial or of a different ethnicity than they are — a reflection of the increasing diversity of multigenerational American families.
What Research Says About the Benefits
The arrangement is not without its challenges — caring for grandchildren full-time can be physically and emotionally demanding — but research consistently points to benefits on both sides of the relationship. Studies suggest that grandparent involvement is linked to better developmental and emotional outcomes for children, while grandparents who are actively involved in caring for grandchildren show improved cognitive health and lower rates of isolation. Among grandparents surveyed in a separate AARP study, 72% said they hardly felt isolated, compared to 62% of those without grandchildren.
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