How America Should Spend on Child Care

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UMOST LIKE As a wealthy European country, the United States does not have a cohesive public child care system. But it’s surprisingly close to having it. During World War II, Congress created a federal day care center to encourage women to work in factories. These were then dismantled. In 1971, Congress adopted a comprehensive child care plan. However, President Richard Nixon denies the bill, calling it “the most radical legislation” and “good public policy does not reduce both parental authority and parental involvement with children.” Needs to be strengthened. “Now Democrats in Congress have created a child care system as part of a huge social spending program and are trying again. It should consist of a universal pre-kindergarten program for ages 3 and 4 and free or heavily funded child care for most Americans. The potential benefits of more systematic support are enormous. However, there are tradeoffs in its design.

It’s easy for some national interventions. Being a parent in a rich world is surprisingly expensive, as any new parent can easily see. Women are very likely to be at home looking after their children, so encouraging them to work in the formal sector can increase gender equality. For some children, formal care is also an education and helps overcome the disadvantages linked to the family situation. Some public spending on child care can bring huge benefits in old age, and generally speaking, it is a worthwhile investment in itself. For example, according to a study by James Heckman of the University of Chicago, investing in a quality program for children from birth to grade 5 results in an internal rate of return of 14%.

Once convinced that there are cases of intervention, the government must think about how to design the device: who is eligible and what care it provides. This system does more than just free parents to work and improve their children. Profit must also outweigh the cost of public portfolios. It is clear that mothers will benefit from child care policies. Numerous studies have found that universal schemes (that is, those that apply to families of all income) support labor force participation. In 1997, Quebec, Canada, implemented a full-time universal plan, with parents spending just $ 5 per day (C $ 7, then $ 4 to $ 5.50). This increased the participation of mothers by almost 8 percent.

But when it comes to children’s outcomes, the results are mixed. Studies available on existing regimens are often patched. For example, the large return on investment identified by Heckman and colleagues is associated with programs for poor families. However, the results of the universal plan are not so brilliant. A meta-analysis, published in 2018 by Thomas van Huizen and Janneke Plantenga of the University of Utrecht, investigated 30 studies of such programs. Only a third found a positive effect on the child’s outcome, and a fifth found a negative effect. The plan in Quebec dramatically increased mothers’ participation, but a study by Michael Baker at the University of Toronto, Jonathan Gruber at the Massachusetts Institute of Technology, and Kevin Milligan at the University of British Columbia worsened cognitive outcomes and children’s health. I discovered that.

Literature reviews also found that poor children benefited the most from universal programs. A well-cited study by Tarjei Havnes at the University of Oslo at the time and Magnet Mogstad at the University of Chicago found that heavily subsidized childcare systems began to spread to Norwegian children born in the late 1960s and early 1970s. I investigated what happened sometimes. They found a strong positive effect on the future incomes of poor children, but a negative effect on rich children whose parents would otherwise have provided better child care than the state. I found. The researchers conclude that the benefits of providing subsidized child care to middle and upper class children are unlikely to outweigh the costs.

On top of that, universal care can be regressive. In wealthy European countries, low-income families are one-third less likely to benefit from childcare services than wealthy families. In the United States, poor families tend to respond to surveys that they prefer informal home child care over formal child care. This suggests that Universal Offers are directing public funding to people who don’t need it, meaning testing is a more effective way to target support.

Once you’ve decided who should get the help, the next question is how to provide it. The evidence here suggests that quality is very important for the outcome of the child. Full-time programs do not always work better than part-time programs. Quebec’s disappointing results are often due to very different criteria. In contrast, a lottery study involving infants in the Oslo care program, the quality of which is tightly regulated by the state, by Havnes and Nina Drange of the Norwegian Statistical Office is important for standardized tests performed at the age of seven. Improvements have been noted.

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Left-wing American politicians like Elizabeth Warren tend to speak of “underinvestment” and “childcare desert”. However, if existing child care arrangements are of poor quality, spending alone will not improve children’s outcomes. If the policy is to help those in need, a framework that assesses the benefits of child care for the family and determines the costs is essential. Without it, America’s child care centers are also at risk of unsightly regulatory upheavals: the same tangles of subsidies, supply restrictions, and poor quality that plague higher education and health care.

When the United States seeks to Europeanize its safety nets, the question is not whether a more cohesive child care system should exist, but how it should be designed. Fifty years after Nixon refused to raise children universally, he is still looking for a truly effective babysitting US state. â– â– 

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This article was published in the print version of the Treasury and Economics section under the heading “Nanny Status”.

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